WASHINGTON – We continue to work together to advance the international economic response to the COVID-19 pandemic, with a focus on the poorest and most vulnerable countries.  COVID-19 has exacerbated existing debt vulnerabilities in many low-income countries, highlighting the importance of debt sustainability and transparency to long-term financing for development.   We welcome efforts of the international financial institutions (IFIs) to amplify their support for the most vulnerable countries.

In this context, we are committed to implementing the Debt Service Suspension Initiative (DSSI) agreed by the G20 and the Paris Club, by suspending official bilateral debt payments for the poorest countries to year-end 2020 and possibly longer, providing those countries fiscal space to fund social, health, and other measures to respond to the pandemic.  In line with the G20 and Paris Club DSSI agreements, we will implement the DSSI across our export credit agencies and other public lending agencies, and call on all official creditors to do so, too.  Given the importance of private financing for sustainable development, we welcome leadership by the Institute of International Finance (IIF) in coordinating private sector participation, and look forward to follow-up.  We look forward to multilateral development banks providing further details on how they will support DSSI beneficiary countries. Continue Reading

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Tiff Macklem’s first rate meeting at the helm of the Bank of Canada on Wednesday is expected to produce virtually the same policies set during the last meeting, according to economists.

The overwhelming market consensus is for the bank’s governing council to keep the overnight rate at 0.25pct and remain prepared to add to its current quantitative easing programme if required. At the start of the corona crisis the bank was quick to implement major liquidity programmes amounting to weekly asset buys of at least CAD5bln of Government of Canada bonds.

Since the crisis began, the bank has reduced its policy interest rate by a total of 150 basis points to 0.25pct, what the bank calls its "effective lower bound".

A note from Carlos Capistran and Ben Randol of BofA Global Research says, “The BoC acted fast amid the pandemic to bring the policy rate down to the effective lower bound. We expect the BoC to leave the policy rate at the current level for many quarters and believe the chance of a negative rate is low.”

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Reports OPEC+ Jun 4 Meeting In Doubt Over Disputes On Oil-Quota Cheating
Trump Backs Off Push To Federalize Forces Against Riots
US NIH’s Fauci ‘Cautiously Optimistic’ About Covid-19 Vaccine
Biden Wins Democratic Presidential Primary In District Of Columbia
China Caixin Services May PMI Back In Growth At 55.0 Beats 47.3 Est
EZ May Final PMI Services, Composite Revised Higher Beating Estimates
BoE’s Bailey Tells UK Banks To Step Up Plans For A No-Deal Brexit Scenario
Merkel Forced To Delay Stimulus Package Amid Coalition Impasse
German To Lift Travel Ban From EU, Schengen Countries, UK From June 15
German May Unemployment Rate Hits 4 Year High At 6.3% (est 6.2%)
Europe Renews Push To Slash Global Tariffs On Medical Goods
EU Looks To Johnson To Stop No-Deal Brexit With Talks At Impasse
Italy Receives Over EUR100B Orders In Benchmark 10 Year Bond Offering
Amazon Plans Summer Sale For June 22 To ‘Jumpstart Sales’
Renault Rallies As Finalizes EUR5B Credit Facility With French State

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