International Financial Institutions’ Ongoing Response to the Covid-19 Crisis

September 21, 2020

The CSIS Economics Program is tracking commitments, approvals, and disbursements by major international financial institutions (IFIs) to meet the massive financing needs generated by the Covid-19 pandemic and its economic fallout. These IFIs include the International Monetary Fund (IMF), World Bank Group, and major regional development banks. We also include select regional financing arrangements (RFAs), which, together with the IFIs, central bank bilateral swap lines, and individual countries’ foreign reserve holdings, comprise the Global Financial Safety Net (GFSN).

Based on data updated through September 14:

1. The pace of new financing approvals has slowed across institutions. In August, the IFIs and RFAs in our dataset collectively approved $7.9 billion in new funding, a sharp drop from the $29 billion approved in July and $37.6 billion approved in June. Through the first two weeks of September, IFIs and RFAs approved only $2.5 billion in new support. Since our August 17 update, the IMF approved additional financing for one country, a $28 million augmentation of Mauritania’s Extended Credit Facility (the IMF approved a $765 million augmentation of Angola’s Extended Fund Facility on September 16). Multilateral development banks (MDBs) approved $4.3 billion in new funding since our last update, led by the European Investment Bank (EIB), which approved $1.9 billion in new support, and the World Bank Group, which approved $880 million. The African Development Bank (AfDB), approved just one program worth $27 million since our August 17 update, representing a particularly sharp decline in new approvals.

2. We estimate IFIs and RFAs have approved $182.8 billion in Covid-19-related support since January 27, an increase of $4.4 billion since our last update on August 17. The IMF has approved $87.7 billion, including emergency assistance and precautionary lines of credit. The MDBs combined have approved $93.8 billion. Regional Financing Arrangements have approved a combined $1.3 billion.

3. We estimate IFIs and RFAs have disbursed $124.2 billion, about two-thirds of the amount approved. Reflecting the precautionary nature of a large portion of IMF support, the IMF has disbursed around 43 percent of its approved funding, or $37.9 billion. MDBs have disbursed $84.9 billion, or 91 percent of the total amount approved. The amount of funding disbursed as a share of new approvals has remained steady since July.

4. Low-income countries have received less financial support in absolute dollar terms and relative to their populations but higher support relative to the size of their economies. Using income classifications from the World Bank, we estimate IFIs and RFAs in our dataset have collectively approved and disbursed $9 billion for 26 low-income countries, accounting for 4.9 percent of total approved funding and 7.2 percent of total disbursed funding.

5. Regionally, the Americas remain the largest recipient of IFI and RFA approvals, while Africa and Asia/Oceania have received the most disbursements. IFIs have approved $70.2 billion in funding for the Americas but disbursed only $22.3 billion, with the IMF’s three precautionary Flexible Credit Lines with Colombia, Chile, and Peru accounting for the vast majority of the difference. Africa and Asia/Oceania have received $39.4 billion and $33.7 billion in disbursements, respectively.

This analysis is based on IFI press releases along with additional information as provided by the institutions; any corrections and/or clarifications will be included in future updates. Our dataset of IFI responses is available for download here. Our previous analyses of IFI responses are available here.

CSIS methodology for estimating disbursements assumes full disbursement of emergency financing instruments as indicated by the financing institutions themselves. In the case of IMF and RFA lending, disbursements are based on press releases and correspond to actual disbursement schedules. However, disbursement schedules from other official sources, including many MDB operations, are often not included in public press announcements. For purposes of the attached data file, we assume full disbursement of such operations. This treatment, however, is likely to result in an overestimation of MDB disbursements. Starting with the October 2020 update, we report only headline approvals in the summary.

MDBs include the African Development Bank (AfDB), Asian Development Bank (AsDB), Asian Infrastructure Investment Bank (AIIB), European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB), Inter-American Development Bank Group (IADB), Islamic Development Bank (IsDB), Development Bank of Latin America (CAF), New Development Bank (BRICS Bank), and World Bank Group (WB). RFAs include the Arab Monetary Fund (AMF), Chiang Mai Initiative Multilateralization (CMIM), Eurasian Fund for Stabilization and Development (EFSD), European Stability Mechanism (ESM), and Latin American Reserve Fund (FLAR). Country income group classifications reflect World Bank categories.

Stephanie Segal is a senior fellow with the Economics Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Dylan Gerstel is a research assistant with the CSIS Economics Program. Joshua Henderson is a research intern with the CSIS Economics Program.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

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