The G20 Finance Ministers and Central Bank Governors met virtually on Monday 23 March 2020, under the Saudi Arabia G20 Presidency, to discuss the impacts of the Covid-19 pandemic on the global economy and financial systems, as well as to coordinate their efforts in response to this global challenge, preparing for the coming G20 Leaders special summit on combating the global coronavirus pandemic. Vietnam attends the Conference as a guest member representing ASEAN.
At the Meeting, the delegates agreed that the global economic prospects have been worsening significantly since the G20 Ministers of Finance and Central Bank Governors Meeting in February 2020. And the outbreaks of the Covid-19 pandemic worldwide have been negatively affecting the factors on both supply and demand sides. Many countries have been implementing drastic fiscal and monetary measures to mitigate the negative impacts of the pandemic on the economy, in which the fiscal policy focuses on stimulus measures, and the monetary policy towards ensuring systemic liquidity.
As for the international organizations, the International Monetary Fund (IMF) said it is prepared to assist countries in balance-of-payments difficulties caused by the impacts of the pandemic from the US $ 1 trillion loan resource. In addition, the IMF is also ready to deploy emergency financial support instruments, and the Fund has been also monitoring and assessing the progress of the pandemic and making policy recommendations for the member countries. The IMF also encourages the Central banks of member countries to conduct bilateral currency swaps, especially for emerging economies. Meanwhile, the World Bank Group (WBG) said it has adopted a 14 billion USD package to deal with the global Covid-19. Specifically, 8 billion USD will be allocated by the International Finance Corporation (IFC) to provide rapid support to the private sector businesses, while the remaining 6 billion USD will be used by the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA) to support health systems of different countries. The World Bank and the IMF are also working together on debt reliefs for low-income countries that are under heavy debt burdens. The Financial Stability Council (FSB) emphasizes the importance of securing lending activities of the banking system and the USD-financed markets, as well as ensuring the quality of the collaterals. Banks need to be allowed to flexibly use the capital buffers and liquidity to ensure financial intermediation. The IMF will work closely with the WBG and other international financial institutions to deploy all available resources and seek additional measures necessary in order to support the financial stability and easing liquidity tensions for the emerging markets and developing economies.
In conclusion, the G20 Finance Ministers and Central Bank Governors reached an agreement to develop a joint G20 Action Plan in response to the Covid-19 pandemic, which will outline the individual and collective actions that the G20 has taken and will be taking to respond to the Covid-19 pandemic. The Meeting agreed to continue to closely monitor the evolutions of the Covid-19 pandemic, its impacts on the economic and financial conditions, and continue to take actions to support the economies during and after the pandemic. The G20 Ministers of Finance and Central Bank Governors emphasized the importance of coordinated actions in responding to the pandemic and reaffirmed the need to continue coordinating efforts on a bilateral and multilateral basis to address the risks and instabilities related to debts arising from the coronavirus pandemic, especially in the low-income countries. In addition, the Meeting also suggested that beside urgent response actions, the countries should set a vision for actions in the medium and the long terms in order to promote rapid economic recovery and improve potential economic growth.
VA