Federal Council agrees Swiss contributions to International Monetary Fund
Bern, 19.06.2020 - During its meeting on 19 June 2020, the Federal Council agreed three financial contributions to the International Monetary Fund (IMF). The contributions are aimed at safeguarding the IMF's regular resources, offering special support to poorer countries to deal with the COVID-19 pandemic, and providing debt relief to Somalia.
The IMF plays an important role in stabilising the international financial and monetary system, as well as in global crisis management. In order to safeguard the IMF's regular resources, the Federal Council has commissioned the Swiss National Bank (SNB) to renew the bilateral borrowing agreement with the IMF in the amount of CHF 8.5 billion, with effect from 1 January 2021. With the entry into force of the impending realignment of IMF resources, this borrowing agreement will be reduced to CHF 3.662 billion. The Confederation provides the SNB with a guarantee on the timely repayment of loans drawn by the IMF under the bilateral borrowing agreement.
In addition, the Federal Council adopted the dispatch on a guarantee commitment in the amount of CHF 800 million for an SNB loan to the IMF's Poverty Reduction and Growth Trust (PRGT). The PRGT allows the IMF to grant concessional loans to low-income countries. These loans can help countries to tackle acute economic and financial problems. At the same time, they serve to strengthen the macroeconomic framework and, hence, to promote sustainable growth in these countries. With this contribution, the Federal Council is responding to an urgent appeal from the IMF to deal with the COVID-19 pandemic.
Finally, Switzerland will contribute a total of CHF 10 million to the IMF's debt relief for Somalia. This contribution is part of the broad-based, multilateral debt relief initiative launched in 1996 and supplemented in 2005, for which the country qualified in March 2020.
Address for enquiries
Frank Wettstein, Communications,
State Secretariat for International Finance SIF
Tel. + 41 58 462 38 56, frank.wettstein@sif.admin.ch
Publisher
The Federal Council
https://www.admin.ch/gov/en/start.html
Federal Department of Finance
https://www.efd.admin.ch/efd/en/home.html