Against the background of the declaration of a national emergency in Venezuela in response to the COVID-19, Nicolas Maduro’s administration requested a USD 5 billion loan from the International Monetary Fund (IMF) March 15 to strengthen the healthcare system. However, the organisation rejected the request because there is no “clarity over the recognition” of Maduro’s presidency. This is the first time that the IMF has expressed itself on the political crisis in Venezuela. The country is expected to continue to seek financing in the coming weeks.
The USD 5 billion loan requested by Venezuela was through the emergency fund of the Rapid Finance Facility. This mechanism allows all IMF countries to obtain financial assistance without the need to have an economic program approved by the agency. According to the Venezuelan government’s statement, the money would help “strengthen our capacity to respond to the new coronavirus pandemic.
However, the IMF expressed that it “is not in a position to consider this request” because it believes that the recognition of Maduro as President of Venezuela is unclear. Although the multilateral organization has not yet taken a position on whether it recognizes Juan Guaidó, president of the National Assembly, or Maduro as head of state, this is the first time it has expressed itself on the political crisis in the South American country.