The Group of 20 (G20) leading economies have agreed to temporary debt relief for the world’s poorest countries.
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“We support a time-bound suspension of debt service payments for the poorest countries that request forbearance,” the G20 finance ministers and central bank governors said following their virtual meeting on Wednesday.
The suspension period will start on May 1, and will last until the end of 2020, and both the principal repayments and interest payments will be suspended, they added.
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They said that creditors will consider a possible extension during 2020, taking into account a report on the liquidity needs of eligible countries by the World Bank and International Monetary Fund (IMF).
The World Bank Group and the IMF have welcomed the move.
“We strongly welcome the decision of the G20 to respond to our call to allow the poorest countries of the world that request forbearance to suspend repayment of official bilateral credit on May 1,” they said in a joint statement.
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“This is a powerful, fast-acting initiative that will do much to safeguard the lives and livelihoods of millions of the most vulnerable people,” they added.
Earlier in the day, French President Emmanuel Macron called for a global moratorium on debt repayments by African countries, amid warnings that sub-Saharan Africa is headed for its worst economic performance in at least 50 years due to the coronavirus pandemic.
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Macron told Radio France Internationale that he hoped the virtual meeting of G20 finance ministers could agree on the moratorium.