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Michael Perks, Yudong Rao, Mr. Jongsoon Shin, and Kiichi Tokuoka
This paper makes contributions to the study of bilateral swap lines (BSLs). First, this paper fills a BSL information gap by constructing a comprehensive database of BSLs based on publicly available information, including after the onset of the COVID-19 pandemic. Second, the paper provides the results of regression analysis exploring several empirical questions that were not covered in previous studies. The paper documents the evolution of BSLs into an important part of the Global Financial Safety Net (GFSN), with some helping to stabilize financial market during both the Global Financial Crisis (GFC) and the COVID-19 pandemic. Analysis suggests that countries on the recipient side of BSLs are more likely to sign and renew BSLs designed to alleviate balance of payments needs as their external position weakens. U.S. Federal Reserve BSLs appear to have been effective at stabilizing financial market conditions during the COVID-19 pandemic.
International Monetary Fund. Strategy, Policy, & Review Department, International Monetary Fund. Finance Dept., and International Monetary Fund. Legal Dept.
To help support members faced with the COVID-19 pandemic, the Fund temporarily increased certain access limits to its emergency financing (EF) instruments, i.e., Rapid Credit Facility (RCF) and Rapid Financing Instrument (RFI). While this expanded support has been critical to help countries manage the pandemic, the increase in access limits was not applied to the Large Natural Disasters (LND) windows within the EF toolkit, reducing the flexibility to respond to such LNDs. This paper proposes to temporarily increase by 50 percent of quota the annual access limit (AAL) and cumulative access limit (CAL) under the LND windows of the RCF and RFI. The changes to the “LND windows” would be in effect through end-December 2021, in line with the other temporary changes of access limits under EF instruments. The case for further extensions to all the temporarily increased EF AALs and CALs will be examined after the 2021 Annual Meetings.
International Monetary Fund. African Dept.
The economic shock associated with the COVID-19 pandemic is set to have long-lasting effects on the economic outlook for CEMAC. The pandemic itself seems to be now broadly under control in the region, and the policy response from national and regional authorities, supported by significant emergency financing by the Fund, helped mitigate the initial economic fallout. With lower medium-term oil prices, the outlook projects that CEMAC’s fiscal and external adjustments will be slower than previously envisaged, entailing large external financing needs (around €6.6 billion for 2021–23). Gross international reserves will now reach the equivalent of 5 months of imports by 2025 vs. 2022 pre-pandemic, while net foreign assets (NFA) will be below previous expectations. Public debt would remain at elevated levels, albeit on a declining trend after the increase in 2020. This outlook is highly uncertain and contingent on the evolution of the pandemic and its impact on oil prices. Other significant risks include: delayed implementation of the ongoing or a second phase of new Fund-supported programs, difficulties in filling large external financing needs, and a deterioration in the security situation.
International Monetary Fund. African Dept.
The economic shock associated with the COVID-19 pandemic is set to have long-lasting effects on the economic outlook for CEMAC. The pandemic itself seems to be now broadly under control in the region, and the policy response from national and regional authorities, supported by significant emergency financing by the Fund, helped mitigate the initial economic fallout. With lower medium-term oil prices, the outlook projects that CEMAC’s fiscal and external adjustments will be slower than previously envisaged, entailing large external financing needs (around €6.6 billion for 2021–23). Gross international reserves will now reach the equivalent of 5 months of imports by 2025 vs. 2022 pre-pandemic, while net foreign assets (NFA) will be below previous expectations. Public debt would remain at elevated levels, albeit on a declining trend after the increase in 2020. This outlook is highly uncertain and contingent on the evolution of the pandemic and its impact on oil prices. Other significant risks include: delayed implementation of the ongoing or a second phase of new Fund-supported programs, difficulties in filling large external financing needs, and a deterioration in the security situation.
International Monetary Fund. African Dept.
Chad’s economy has been severely impacted by the twin Covid-19 pandemic and terms of trade shocks. A national lockdown to contain the spread of the virus, disruptions in supply chains, and a drop in international oil prices are curtailing economic activity and weakening the outlook. While the authorities’ policy response has been timely and proactive, the economic shock and containment policies are triggering a severe recession, resulting in significant social costs and urgent balance of payment and budget financing needs. These are estimated at 7.0 percent of non-oil GDP compared to 4.6 percent in IMF Country Report No. 20/134. The pandemic is unfolding in a context of rising regional and domestic insecurity and an already weak health care system, which are exacerbating Chad’s vulnerabilities.
International Monetary Fund. African Dept.
Chad’s economy has been severely impacted by the twin Covid-19 pandemic and terms of trade shocks. A national lockdown to contain the spread of the virus, disruptions in supply chains, and a drop in international oil prices are curtailing economic activity and weakening the outlook. While the authorities’ policy response has been timely and proactive, the economic shock and containment policies are triggering a severe recession, resulting in significant social costs and urgent balance of payment and budget financing needs. These are estimated at 7.0 percent of non-oil GDP compared to 4.6 percent in IMF Country Report No. 20/134. The pandemic is unfolding in a context of rising regional and domestic insecurity and an already weak health care system, which are exacerbating Chad’s vulnerabilities.
International Monetary Fund. African Dept.
Chad’s economy has been severely impacted by the twin Covid-19 pandemic and terms of trade shocks. A national lockdown to contain the spread of the virus, disruptions in supply chains, and a drop in international oil prices are curtailing economic activity and weakening the outlook. While the authorities’ policy response has been timely and proactive, the economic shock and containment policies are triggering a severe recession, resulting in significant social costs and urgent balance of payment and budget financing needs. These are estimated at 7.0 percent of non-oil GDP compared to 4.6 percent in IMF Country Report No. 20/134. The pandemic is unfolding in a context of rising regional and domestic insecurity and an already weak health care system, which are exacerbating Chad’s vulnerabilities.
International Monetary Fund. African Dept.
This paper presents Chad’s Requests for Disbursement Under the Rapid Credit Facility, Extension of the Extended Credit Facility Arrangement, and Rephasing of Access. In response to the coronavirus disease 2019 outbreak, the authorities have taken strong measures to halt the community spread of the virus. They are also scaling up health-related spending and are considering a set of economic measures to support households and businesses. Given the sudden nature of the shocks and their widespread impact, the authorities will be temporarily relaxing the fiscal deficit to allow for the scaling up of health care spending and to accommodate the impact of the sharp drop in oil prices. In order to safeguard debt sustainability, they remain committed to the medium-term fiscal path and will implement the needed adjustment measures as soon as the current crisis abates.
International Monetary Fund. African Dept.
This paper presents Chad’s Requests for Disbursement Under the Rapid Credit Facility, Extension of the Extended Credit Facility Arrangement, and Rephasing of Access. In response to the coronavirus disease 2019 outbreak, the authorities have taken strong measures to halt the community spread of the virus. They are also scaling up health-related spending and are considering a set of economic measures to support households and businesses. Given the sudden nature of the shocks and their widespread impact, the authorities will be temporarily relaxing the fiscal deficit to allow for the scaling up of health care spending and to accommodate the impact of the sharp drop in oil prices. In order to safeguard debt sustainability, they remain committed to the medium-term fiscal path and will implement the needed adjustment measures as soon as the current crisis abates.
International Monetary Fund. African Dept.
This paper presents Chad’s Requests for Disbursement Under the Rapid Credit Facility, Extension of the Extended Credit Facility Arrangement, and Rephasing of Access. In response to the coronavirus disease 2019 outbreak, the authorities have taken strong measures to halt the community spread of the virus. They are also scaling up health-related spending and are considering a set of economic measures to support households and businesses. Given the sudden nature of the shocks and their widespread impact, the authorities will be temporarily relaxing the fiscal deficit to allow for the scaling up of health care spending and to accommodate the impact of the sharp drop in oil prices. In order to safeguard debt sustainability, they remain committed to the medium-term fiscal path and will implement the needed adjustment measures as soon as the current crisis abates.