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Tuesday, April 14,
2020 /12:48 AM / by IMF / Header Image Credit: IMF
·
The Executive Board of the International
Monetary Fund (IMF) today approved the disbursement of SDR 738 million (about
US$1 billion) to be drawn under the Rapid Credit Facility (RCF). The
disbursement will help address the urgent fiscal and balance of payments needs
that Ghana is facing, improve confidence, and catalyze support from other
development partners.
The COVID-19 pandemic is already impacting
Ghana severely. Growth is slowing down, financial conditions have tightened,
and the exchange rate is under pressure. This has resulted in large government
and external financing needs. The authorities have timely and proactively
responded to contain the spread of the COVID-19 pandemic in Ghana and support
affected households and firms.
The IMF continues to monitor Ghana's
situation closely and stands ready to provide policy advice and further support
as needed.
Following the Executive Board's discussion of Ghana, Mr. Zhang, Deputy Managing Director and Chair, issued the following statement:
"The COVID-19 pandemic is impacting Ghana severely. Growth is projected to slow down, financial conditions have tightened, and the exchange rate is under pressure. The budget deficit is projected to widen this year given expected lower government revenues and higher spending needs related to the pandemic. The Fund's emergency financial assistance under the Rapid Credit Facility will help address the country's urgent financing needs, improve confidence, and catalyze support from other international partners.
"The authorities' response has been timely,
targeted, and proactive, focused on increasing health and social spending to
support affected households and firms. The Central Bank has recently taken
steps to ensure adequate liquidity, preserve financial stability, and mitigate
the economic impact of the pandemic, while allowing for exchange rate
flexibility to preserve external buffers.
"The uncertain dynamics of the pandemic
creates significant risks to the macroeconomic outlook. Ghana continues to be
classified at high risk of debt distress. The authorities remain committed to
policies consistent with strong growth, rapid poverty reduction, and
macroeconomic stability over the medium-term.
"Additional support from other development partners will be required and critical to close the remaining external financing gap and ease budget constraints."
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