ADB has joined governments, central banks and multilateral bodies globally to firm up steps to deal with the epidemic that has spread to over 70 countries, with its epicentre in China.
The Asian Development Bank (ADB) on Wednesday announced a $6.5-billion package to help its developing member-countries deal with the coronavirus pandemic, and promised to pump in more funds, if required.
The initial package includes $3.6 billion in sovereign operations for a range of responses to the health and economic consequences of the pandemic, and $1.6 billion in non-sovereign operations for MSMEs, domestic and regional trade, and firms that are directly impacted, it said.
ADB will also mobilise about $1 billion in concessional resources through reallocations from ongoing projects and is assessing possible needs for contingencies. It will make available $40 million in technical assistance and quick-disbursing grants as well.
In a statement, ADB President Masatsugu Asakawa said: “ADB stands ready to provide further financial assistance and policy advice down the road whenever the situation warrants, on top of the $6.5 billion package. This pandemic has become a major global crisis. It requires forceful action at national, regional, and global levels.”
With this, ADB has joined governments, central banks and multilateral bodies globally to firm up steps to deal with the epidemic that has spread to over 70 countries, with its epicentre in China.
Earlier this month, the International Monetary Fund (IMF) had announced a $50-billion support for the developing countries grappling with the coronavirus outbreak and warned that the epidemic could drive down 2020 global economic growth to the worst level since the 2008 financial crisis. The World Bank recently announced $12 billion to support poor and developing countries to deal with the coronavirus threat.
Already, the US Federal Reserve cut the interest rates by 50 basis points to 1%, the first emergency rate reduction since the 2008 financial crisis, apprehending the negative impact of the coronavirus outbreak on the economy. Even central banks of Australia and Malaysia have cut interest rates. The UK central bank is also expected to follow suit. The Reserve Bank of India, too, has declared its intent to intervene, if required.
Finance ministers from the group of seven (G7) developed nations have also announced their resolve to use “appropriate policy tools” at their disposal. The US has announced a massive package for its citizens, with estimated cost of around $1 trillion.