The International Monetary Fund (IMF) has approved a total of $356.5 million support for Myanmar as the country suffers from an ailing economy despite its low virus transmission cases.
In a statement released on its website on Saturday, June 27, the IMF’s executive board said that it approved a disbursement of $118.8 million under the Rapid Credit Facility (RCF) and a purchase of $237.7 million under the Rapid Financing Instrument (RFI) for Myanmar.
“This will help meet the urgent balance-of-payments and fiscal needs arising from the COVID-19 (coronavirus disease-2019) pandemic, support the government’s plans to boost spending especially on health and social safety nets,” the IMF said.
Myanmar has so far recorded 293 confirmed cases, of which 215 have recovered while six others died.
While the country was one of the countries in the Southeast Asian region with the lowest number of cases, its economy was severely affected by slow domestic demand that has disrupted households and businesses, including the agriculture sector which comprises a fifth of its economy and over half of employment.
“Domestic demand has weakened as the necessary measures to control a domestic outbreak have affected economic activities. As revenues fall and expenditures rise, the fiscal deficit is increasing, putting pressure on funding and public debt,” the IMF said.
“The external position is deteriorating due to the collapse in global demand for garments and gas, weak tourism and remittance inflows and lower foreign direct investment,” it added.
The government has put in place its COVID-19 Economic Relief Plan that aims to preserve macroeconomic stability and mitigate the impact of the pandemic on its population.
In addition to increasing health expenditures, the government was expanding food distribution and cash transfer programs to the most vulnerable and supporting businesses and farmers across all regions of the country.
“The authorities have expressed interest in exhausting the 100 percent of quota annual access limit under the RCF/RFI (about $700 million) and have committed to putting in place targeted governance, transparency and accountability measures to ensure the appropriate use of emergency financing,” the monetary fund said.
“The IMF continues to monitor Myanmar’s situation closely and stands ready to provide further advice and support if needed,” it added.
Myanmar has accepted the obligations of Article VIII of the IMF’s Articles of Agreement, reinforcing its commitment to maintaining an exchange system free of restrictions on payments for current international transactions.
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