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The International Monetary Fund and the World Bank Group have asked official bilateral lenders to suspend debt repayments from International Development Association (IDA) countries.

The Bretton Wood institutions made the request in a joint statement released on Wednesday.

The International Development Association is an international financial institution which offers concessional loans and grants to the world’s poorest developing countries.

“The coronavirus outbreak is likely to have severe economic and social consequences for IDA countries, home to a quarter of the world’s population and two-thirds of the world’s population living in extreme poverty,” the statement read.

“With immediate effect—and consistent with national laws of the creditor countries—the World Bank Group and the International Monetary Fund call on all official bilateral creditors to suspend debt payments from IDA countries that request forbearance.”

“This will help with IDA countries’ immediate liquidity needs to tackle challenges posed by the coronavirus outbreak and allow time for an assessment of the crisis impact and financing needs for each country.”

Leaders of G-20 countries were also urged to task the IMF and World Bank with making assessments to identify countries with “unsustainable debt situations and to prepare a proposal for comprehensive action by official bilateral creditors to address both the financing and debt relief needs of IDA countries”.

The World Bank Group and the IMF said it is important to provide a global sense of relief for developing countries send a strong signal to financial markets.

The World Bank Group and International Monetary Fund are headed by David Malpass and Kristalina Georgieva (both pictured) respectively.