U.S. opposition to opening new avenues of funding for Iran and China is preventing the International Monetary Fund from deploying a powerful tool to help countries fight the economic impact of the coronavirus, according to two sources familiar with the matter.
FILE PHOTO: The International Monetary Fund headquarters building is seen ahead of the IMF/World Bank spring meetings in Washington, U.S., April 8, 2019. REUTERS/Yuri Gripas/File Photo
The Trump administration does not want Iran and China to have access to billions of dollars in new resources with no conditions, two of the sources familiar with the IMF’s deliberations said, asking not to be identified given the sensitivity of the issue. Doing so again now could provide more flexibility to the 102 countries that have already sought IMF emergency loans and grants, and allow aid to flow to high-debt countries that can’t qualify for new IMF loans, such as Argentina and Zimbabwe.
Among these efforts is persuading wealthier countries to donate or lend their existing, unused SDRs to IMF lending facilities for poor countries. The Fund is trying to triple the resources in its Poverty Reduction and Growth Trust to $18 billion, she said.
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