This will help meet the country’s balance-of-payments and fiscal needs arising from the COVID-19 pandemic and support the government’s plans to boost spending on health and social safety nets. The emergency financing will also catalyse additional support from the international community, including under the Debt Service Suspension Initiative supported by the G-20 and the Paris Club, according to the IMF’s announcement. 

The funding to be disbursed so far is around half the amount it is entitled to from the IMF. Myanmar has expressed interest in exhausting 100 percent of its $700 million quota under the RCF/RFI and has accepted the obligations under Article VIII of the IMF’s Articles of Agreement. These include maintaining an exchange system free of restrictions on payments for current international transactions, the IMF said. 

In the past three months, Myanmar has received commitments for around $1.25 billion in low-interest loans from international development partners and lenders to help it respond to the economy damage caused by COVID-19.

On June 26, the World Bank also approved a $200 million credit from the International Development Association to increase agricultural productivity and diversification and enhance market access for Myanmar farmers.

International organisations have so far offered to channel up to $2 billion in the form of loans and grants to the country, Minister of Planning, Finance and Industry U Set Aung said during a video conference with State Counsellor Daw Aung San Suu Kyi on June 16.

The Myanmar economy is expected to deteriorate further this year as a result of COVID-19,  Daw Aung San Suu Kyi said during the meeting.

She said any economic damage caused by the pandemic so far is likely to worsen in the coming months and that Myanmar is only just beginning to feel the economic impact of COVID-19. 

“The most damage will be felt in the third and fourth quarter of the year but we would like the public to know that financial preparations to counter to fallout have already been made,” the State Counsellor said. 

Since the pandemic broke out in late March, the government has channeled more than K160 billion towards preventing, controlling and responding to COVID-19. The bulk of the funds have been distributed as low-interest loans to Myanmar businesses in manufacturing and tourism affected by COVID-19.

The government has allocated the next K100 billion in loans to businesses negatively impacted by COVID-19 and will prioritise the agriculture and livestock sectors. 

Myanmar will allocate around K1.5 trillion in foreign loans during  fiscal 2020-21 to support those struggling from disruptions caused by COVID-19,  U Maung Maung Win, deputy Minister of Planning, Finance and Industry, said in Nay Pyi Taw on June 24.

Source: https://www.mmtimes.com/news/myanmar-commits-imf-funding-pandemic-persists.html