Addis ababa, May 1/2020( ENA) The International Monetary Fund (IMF) Executive Board on Thursday has approved 411 million USD in emergency assistance to Ethiopia to address the COVID-19 pandemic.

A statement from IMF stated that Ethiopia is facing a pronounced economic slowdown and an urgent balance of payments need owing to the COVID-19 pandemic.

“The COVID-19 pandemic has created severe health risks and weighed heavily on the Ethiopian economy. If the pandemic is not contained, it will put severe pressure on the health system with devastating social consequences,” the statement added.

Thus, to address this urgent need, the IMF approved 411 million USD in emergency assistance for Ethiopia under the Rapid Financing Instrument.

Ethiopia will also benefit from IMF debt service relief under the Catastrophe Containment and Relief Trust, it was indicated.

“The authorities have taken swift and decisive action to contain the impact of COVID-19 by strengthening the health system, adopting a state of emergency to limit the spread of the virus, and implementing measures to support the economy,” it said.

The Executive Board also approved a re-phasing of disbursements under the Extended Credit Facility (ECF) and Extended Financing Facility (EFF) arrangements that have been supporting Ethiopia’s economic reform program.

Moreover, Ethiopia will benefit from the IMF Executive Board decision of April 13, 2020 to provide debt service relief to the poorest and most vulnerable countries that are eligible for grant assistance under the Catastrophe Containment and Relief Trust (CCRT).

As a result, the Board has approved Ethiopia’s request for relief under the CCRT on debt service falling due to the IMF until October 13, 2020 of about 12 million USD.

This relief could be extended up to April 13, 2022, subject to the availability of resources under the CCRT, the statement said.

Following the Executive Board’s discussion on Ethiopia, Deputy Managing Director and Chair, Tao Zhang said “Ethiopia showed good progress under the extended arrangements with the Fund.”

However, the COVID-19 pandemic has had a significant adverse impact on the economy and created urgent fiscal and balance of payments needs, he said.

Ethiopia has moved decisively to contain the spread of the virus and manage the economic fallout from the global downturn and the needed health-related measures.

The National Bank of Ethiopia (NBE) has appropriately provided liquidity to banks to maintain financial stability.