G20 financial leaders in the most advanced economies said they have reached an agreement on a coordinated approach to suspend debt service payments for the world’s poorest countries. The measure is expected to enter into force on May 1 and continue until the end of this year.

The decision to suspend both principal and interest payments affects all International Development Association (IDA) countries currently servicing IMF and World Bank debt, as well as all underdeveloped countries, according to the UN, which also currently serve obligations to the IMF and the World Bank.

The decision is part of an effort to stimulate the global economy against the backdrop of a coronavirus pandemic that has pushed the global economy into the deepest recession since the Great Depression of the 1930s.

“We have agreed on a coordinated approach with a common timeline that provides key features for this debt foreclosure initiative, which is also agreed with the Paris Club”, says a G20 joint statement.

They also called on private lenders to participate in the “on equal terms” initiative.

The Managing Director of the IMF, Kristalina Georgieva, and the World Bank chief David Malpass praised the G20’s tentative new debt relief deal, which temporarily suspends bilateral debt service payments from the poorest countries.

After the G20 meeting, Georgieva said the IMF is seeking “urgently” about 18 billion USD in new resources for the Poverty Reduction and Growth Trust Fund program for poor countries and is exploring how to use the so-called. Special drawing rights can help with this effort.

At this stage, the agreed debt moratorium will continue until the end of the year, but lenders will consider extending it in 2020, the G20 said.