The International Monetary Fund has said it is set to launch a $50bn trust fund for low-income and vulnerable middle-income countries to help them build resilience to balance of payments shocks and set them on the path to sustainable recovery before the end of 2022.
The IMF disclosed this in a blog post titled, ‘A New Trust to Help Countries Build Resilience and Sustainability’ published on Thursday.
It said, “A proposed $50bn trust fund could help low-income and vulnerable middle-income countries build resilience to balance of payments shocks and ensure a sustainable recovery.
“Even as countries continue to battle COVID-19, it is crucial not to overlook the longer-term challenge of transforming economies to become more resilient to shocks and achieve sustainable and inclusive growth.”
According to the Washington-based lender, the pandemic and climate change are challenges threatening macroeconomic stability and growth, and have a potential for future balance of payments problems.
It said these global public policy challenges are the shared responsibility of individual countries and the international community.
The IMF said it was considering how to channel some of the $650bn SDRs it issued in August from countries with strong external financial positions to vulnerable countries through a Resilience and Sustainability Trust.