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Singapore will contribute US$20.57 million (S$27.73 million) to the International Monetary Fund (IMF), in order to assist vulnerable low-income countries in dealing with the economic fallout from the Covid-19 pandemic.

According to the Monetary Authority of Singapore (MAS), this will be subject to Parliament's approval on April 5.

Grants will be given to three different initiatives

According to MAS, Covid-19 has led to a surge in requests for financial assistance from various low-income countries.

Singapore will be providing grants to three different initiatives.

Firstly, a total of US$17.6 million (S$23.71 million) will be given to the Catastrophe Containment and Relief Trust (CCRT), which provides debt relief to the IMF's poorest and most vulnerable members, in the event of a global health pandemic or natural catastrophe.

MAS said that the CCRT is in need of a US$1.4 billion (S$1.89 billion) replenishment to help strengthen healthcare systems in low-income countries, and that Singapore's grant to the CCRT is commensurate with Singapore's IMF quota share.

The grant to the CCRT will be drawn from MAS's Official Foreign Reserves (OFR).

In addition, Singapore will also be giving US$2 million (S$2.69 million) to the Covid-19 Crisis Capacity Development Initiative (CCCDI), which targets the urgent capacity development needs of countries affected by the Covid-19 pandemic.

This will also be drawn from MAS' OFR.

Finally, Singapore will provide a US$0.97 million (S$1.31 million) grant to the Trust for Special Poverty Reduction and Growth Operations for the Heavily Indebted Poor Countries (PRG-HIPC Trust), in order to support the IMF's US$344 million ($463 million) financing package for Somalia's debt relief.

According to MAS, the IMF has assessed that Somalia's external debt is unsustainable, and urgent assistance is required to clear its prolonged arrears.

Singapore's grant to the PRG-HIPC Trust will come entirely from Singapore's share of existing resources in other IMF accounts, and will not impact the size of Singapore's OFR.

Top image via Unsplash.