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Monetary fund - Shanmugam IAS academy in coimbatore
Monetary fund

IRAN SEEKS IMF HELP

What’s in news?

Iran said it has sought financial assistance from the International Monetary Fund (IMF) to help it combat the novel coronavirus. This is the first time the nation has sought money from the IMF since 1962. 

Key data’s:

  • Iran is one of the worst affected nations in the coronavirus pandemic. 
  • IMF’s Rapid Financial Instrument (RFI) provides rapid financial assistance, which is available to all member countries facing an urgent balance of payments need, as per IMF’s website.
  • “IMF has stated that countries affected by #COVID19 will be supported via Rapid Financial Instrument.

Iran and COVID19:

  • Iran has emerged as the epicenter of the coronavirus spread in the Middle East.
  • It became the world’s third country, after China and Italy, to register more than 10,000 cases of COVID-19.

Background:

  • Iran has been facing economic challenges due to US sanctions. After US had withdrawn from JCPOA (Joint Comprehensive Plan of Action), it had imposed sanctions on Iran.
  • Iran’s neighbors are increasingly shutting their land and sea borders, further isolating the Islamic Republic, which had already been grappling with economic sanctions on oil and gas exports imposed by the United States. 
  • The efforts by Iran’s medical personnel have been “stymied by vast shortages caused by restrictions” on Iran’s access to medicine/equipment.

Iran-US relations:

  • The countries had cordial relations till World War II. However, as the arms race began between US and USSR, US began sensing USSR’s backing towards Iran. In 1953, US and British forces ousted democratically elected Iranian PM Mohammad Mossadeq.
  • In 1979, during the Iranian Revolution, the US backed Mohammed Reza Pahlevi was forced to leave the country. In 2000, Iran began developing nuclear weapons and the United Nations imposed several rounds of sanctions. In 2018, US abandoned nuclear deal JCPOA. In 2020, the Iran top commander Qasem Soleimani was killed by a US drone.

Links to note:

https://www.iasipstnpsc.in/22047-2/

https://www.al-monitor.com/pulse/originals/2020/03/iran-request-imf-loan-coronavirus-cases.html

https://asiatimes.com/2020/03/iran-seeks-imf-help-for-first-time-since-the-shah/

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