Abstract
The COVID-19 pandemic and measures to contain it have worsened the outlook for Afghanistan’s economy—already burdened by fragility, the ongoing conflict, and political uncertainty—and opened an urgent balance of payments gap in 2020, estimated at $857 million (4.5 percent of GDP). To help cover the gap, in the attached Letter of Intent (LOI), the authorities are requesting a disbursement of SDR 161.9 million, 50 percent of quota or about $220 million equivalent, under the Fund’s Rapid Credit Facility’s (RCF) “exogeneous shocks” window. The RCF disbursement will also open fiscal space for essential pandemic-related spending for health and social mitigation. In parallel, the authorities are seeking financing from other sources.
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