Iran asks IMF for $5bn loan to help battle coronavirus

: Crude oil
20/03/12

Sanctions-hit Iran has asked the IMF for an emergency loan to help it battle the coronavirus pandemic.

"In a letter addressed to the head of the IMF, I have requested $5bn from the RFI emergency fund to help in our fight against the coronavirus," Iran's central bank governor Abdolnaser Hemmati said. More than 10,075 people have become infected in Iran, and more than 400 have died.

The RFI, or Rapid Financing Instrument, is a vehicle used by the IMF to provide quick and low-access financial assistance to member countries facing what they deem "an urgent balance of payments need", without needing a full-fledged program in place.

This is the first time Iran has asked the IMF for financial assistance since 1962.

Iran's foreign minister Javad Zarif said on Twitter that the request had been made shortly after the IMF's managing director Kristalina Georgieva announced RFI support for all countries affected by the coronavirus pandemic.

Georgieva "has stated that countries affected by [coronavirus] will be supported via Rapid Financial Instrument," Zarif said. "Our central bank requested access to this facility immediately."

Zarif followed this up with a separate tweet outlining, in detail, the country's "most urgent needs" in its fight against the pandemic.

"Iranian care personnel are courageously battling the coronavirus on the frontlines," he said. "Their efforts are stymied by vast shortages caused by restrictions on our peoples' access to medicine and equipment… Viruses don't discriminate, nor should humankind."

Iran has seen its access to finance severely restricted by economic sanctions imposed on it in 2018 following US president Donald Trump's decision to pull his country out of the Iran nuclear deal. Iran has regularly pointed to these sanctions as a major factor behind its inability to control the spread of the coronavirus. Latest figures from the health ministry indicate a 1,075 increase in the number of confirmed cases in the past 24 hours.

The IMF's most recent estimates show that Iran's gross domestic product (GDP) contracted by 9.5pc in 2019, and that it is unlikely to grow at all this year.

By Nader Itayim

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