"The World Bank Group and the IMF believe it is imperative at this moment to provide a global sense of relief for developing countries as well as a strong signal to financial markets," the Washington-based development lenders said in a joint statement.
"The coronavirus outbreak is likely to have severe economic and social consequences for IDA countries" which will face "immediate liquidity needs to tackle challenges posed by the coronavirus outbreak," the organization said.
The IMF and World Bank called on the Group of 20 nations to support the initiative for "all official bilateral creditors to suspend debt payments from IDA countries that request forbearance."
In addition, the institutions called for an analysis of the financing needs these countries will face, and whether their total debt load is sustainable.
Part of the World Bank, the IDA is one of the largest sources of assistance for the world's 76 poorest countries, providing zero or low interest loans spread over 30 years or more, and grants to some distressed nations.
In the fiscal year ending June 30, 2019, IDA commitments totaled $22 billion, of which 36% was provided on grant terms, according to the World Bank. – Rappler.com