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IMF approves $174.2 million COVID-19 fund for South Sudan

March 31, 2021(Nyamilepedia) — The International Monetary Fund (IMF) on Wednesday approved a disbursement of $174.2 million to South Sudan under the Rapid Credit Facility (RCF) to address Covid-19 pandemic-related effects to the economy.

“The Executive Board of the International Monetary Fund (IMF) today approved a disbursement of SDR 123 million (50 percent of quota or about US$ 174.2 million) to South Sudan under the Rapid Credit Facility (RCF),” Said IMF in a statement.

The institution said that this is the second IMF financial assistance to South Sudan since it joined the IMF in 2012.

IMF added that the disbursement will help finance South Sudan’s urgent balance of payments needs and provide critical fiscal space to maintain poverty-reducing and growth-enhancing spending.

South Sudan has been greatly affected by a sharp decline in international oil prices triggered by the pandemic and devastating floods have eroded economic gains of the peace process which resulted in the decline of the economy by 4.2 percent in the 2020/2021 financial year.

The economic downturn widened the fiscal and the balance of payments deficits, opening large financing gaps in the absence of concessional financing. In the past, the monetization of the fiscal deficit resulted in high inflation and significant exchange rate depreciation.

IMF Deputy Managing Director and Acting Chair, Mr. Mitsuhiro Furusawa, said that the fund will help meet the priority needs of the South Sudanese.

“South Sudan has been hit hard by the COVID-19 pandemic, lower international oil prices, and severe floods in recent months. These challenges have led to urgent balance of payments and fiscal financing needs and reversed early economic gains from political stability.” said Mr. Furusawa.

“The IMF’s emergency financing under the Rapid Credit facility would help meet priority spending needs, catalyze donor support, and foster critical economic reforms envisaged under the Staff-Monitored Program. Prudent fiscal and monetary policies are necessary to promote macroeconomic stability,” He continued.

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