The International Monetary Fund forecast a net profit of $1.9 billion (Dh6.97bn) next year and $2.4bn in 2022 but said the projections are subject to “larger-than-normal” uncertainty owing to the Covid-19 pandemic.
The Washington lender expects a net loss of $1.6bn for the year ended April 30, partly due to an unrealised pension-related adjustment during the fiscal year, it said on Friday.
The accounting adjustment offset net operational income of about $1.9bn and the resulting loss will be absorbed by the fund’s “sizeable” reserves.
“Operational income for [fiscal year] 2021 and [fiscal year] 2022 is expected to remain strong,” the fund said.
“However, these projections are subject to a high degree of uncertainty related to the scale of new lending associated with the Covid-19 economic fallout, as well as the timing and amounts of disbursements under approved arrangements included in the projections.”
The projected net profit for the next two years also depends on uncertainty related to the discount rate used to measure the fund’s retirement plan obligations and asset returns.
Such uncertainty can have “a large impact on the actual outcome, given the heightened volatility in financial markets in the wake of the pandemic”, it said.
Additional uncertainty affecting its income projections includes the performance of the fund’s investment and retirement plan asset portfolios.
The lender’s executive board agreed to maintain the margin on the IMF lending rate unchanged at 100 basis points above the interest rate for Special Drawing Rights – a multilateral reserve asset used by the lender based on a basket of currencies – for the 2021 and 2022 financial years. This is the basic lending rate for member countries that choose to borrow from the IMF.
This year’s net operating income, mainly from lending and investments, was “robust” and reflects “ongoing elevated use of fund credit that is expected to remain high” as member countries seek help to cope with the pandemic.
Last week, the fund temporarily increased the amount of assistance member countries can request in a year and removed limits on the number of disbursements poor countries can secure.
The move came as the lender moves to help strengthen economies struggling because of the pandemic.
As of mid-July, 72 countries had received assistance from the fund's emergency financing instruments after it doubled the annual access limits on April 6.
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
UAE currency: the story behind the money in your pockets
The details
Colette
Director: Wash Westmoreland
Starring: Keira Knightley, Dominic West
Our take: 3/5
SPEC%20SHEET
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BIGGEST CYBER SECURITY INCIDENTS IN RECENT TIMES
SolarWinds supply chain attack: Came to light in December 2020 but had taken root for several months, compromising major tech companies, governments and its entities
Microsoft Exchange server exploitation: March 2021; attackers used a vulnerability to steal emails
Kaseya attack: July 2021; ransomware hit perpetrated REvil, resulting in severe downtime for more than 1,000 companies
Log4j breach: December 2021; attackers exploited the Java-written code to inflitrate businesses and governments
THE BIO: Martin Van Almsick
Hometown: Cologne, Germany
Family: Wife Hanan Ahmed and their three children, Marrah (23), Tibijan (19), Amon (13)
Favourite dessert: Umm Ali with dark camel milk chocolate flakes
Favourite hobby: Football
Breakfast routine: a tall glass of camel milk
Call of Duty: Black Ops 6
Developer: Treyarch, Raven Software
Publisher: Activision
Console: PlayStation 4 & 5, Windows, Xbox One & Series X/S
Rating: 3.5/5