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Written by Andrea Shalal
WASHINGTON, March 23 (Reuters) – U.S. Treasury Secretary Janet Yellen said the $1.2 trillion government funding bill passed by Congress would allow the United States to invest the largest amount in International Monetary Fund (IMF) trusts to aid the world’s poorest countries. He said it would be possible to lend out $21 billion. Saturday.
Yellen said the funding makes the United States the largest supporter of the IMF’s Poverty Reduction and Growth Trust (PRGT). PRGT provides zero-interest financing to support low-income countries in their efforts to stabilize their economies, promote growth, and reduce debt. sustainability.
President Joe Biden signed the bill Saturday after the Senate passed it after midnight, averting a government shutdown. The IMF’s spending follows the $100 billion pledge Biden made with G20 leaders more than two years ago to help low-income and vulnerable countries recover from the coronavirus pandemic and suffer from macroeconomic risks. It will fulfill its promise to provide dollars.
The PRGT is the IMF’s primary vehicle for providing interest-free loans to low-income countries to support their economic programs and help them leverage additional financing from donors, development agencies, and the private sector.
The IMF said it has supported more than 50 low-income countries with about $30 billion in interest-free loans through the PRGT since the pandemic began, reducing instability in poor countries from Haiti to the Democratic Republic of the Congo to Nepal. ing.
The IMF expects PRGT lending demand to reach nearly $40 billion this year, more than four times the historical average.
“Today’s developments demonstrate that the United States is providing assistance to low-income countries still bearing the economic scars of the pandemic, while dealing with high debt vulnerabilities, climate risks, and spillovers from Russia’s war against Ukraine. “This is an important milestone in achieving our commitment to the United States,” Yellen said in a statement first reported by Reuters.
Kevin Gallagher, director of the Center for Global Development Policy at Boston University, said the long-delayed U.S. funding came “at the last minute, especially given the exorbitant interest rates in poorer countries in Africa,” and will help lower-income countries. He said it was a big blow. He already has a large amount of debt.
He said Congress refused to approve a Treasury Department plan to lend some money to the IMF’s Resilience and Sustainability Trust, which was created to help countries finance the fight against climate change and other challenges. He pointed out that he did.
Eric LeCompte, executive director of Jubilee USA Network, welcomed the U.S. funding to PRGT, noting the trust has a history of bipartisan support.
“Increasing resources for efficient programs like this can lift people in developing countries out of poverty,” he said.
There was no immediate comment from the IMF.
Ms. Yellen said funding for the IMF reflects the U.S. government’s continued support for the Fund and the unique role it plays within the international monetary system through policy advice, capacity building, and lending. He said his focus was on good governance, strong economic reforms and necessary adjustments.
“We look forward to continuing our partnership with the IMF to support the needs of low-income countries,” said Yellen. (Reporting by Andrea Shalal; Editing by William Mallard and Alistair Bell) )
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