Dear maria, In today's edition we hear more about how Latin America has been hit hard by the pandemic, how to combat COVID's unequal effect, issues with tackling debt, the implication of low interest rates for a long period, central bank reserve currencies, Central America's twin challenge, and much more. On that note, let's dive right in. LATIN AMERICA'S COVID PLIGHTLatin America has been hit harder by the COVID-19 pandemic than other parts of the world and faces a steeper climb to recovery, IMF Managing Director Kristalina Georgieva said during a virtual event with Council of the Americas CEO Susan Siegel. While the region contains only 8 percent of the global population, it represents roughly 20 percent of infections and 30 percent of deaths from the virus. On the economic side, the region's economy is projected to shrink by 8 percent, which is nearly double the 4.4 percent contraction expected worldwide. The economic outlook for 2021 shows the region will be playing catch up with the growth of 3.6 percent expected next year compared to 5.2 percent for the rest of the world. The MD laid out three reasons why the region is harder hit economically: previous years of slow growth, a large proportion of workers employed in contact-dependent industries that were made more vulnerable by the crisis, and an overall lack of investment in healthcare and other social systems. She also warned against a "K-shaped" recovery, whereby high-skilled workers and digital-focused parts of the economy recover but those with lower skills and vulnerable groups, like women and young people, are left behind. "Will this sober moment, a tragedy that affects virtually all of us, translate into investing in resilience of people--education, health, social protection ... [and a] resilient planet?" she asked. Watch the full event here. Promoting equity and accountability: In a separate event on Wednesday, the MD joined Sri Mulyani Indrawati, Minister of Finance of Indonesia; Gene Dodaro, Comptroller General of the United States; Warren Krafchik, Executive Director, International Budget Partnership moderated by Beena Pallical, General Secretary, National Campaign on Dalit Human Rights to discuss how to promote equity and accountability in the COVID-19 response. "In this crisis so much is being done so fast," she said about the scale of assistance being provided to countries. Keeping the receipts means more than merely stuffing them in a drawer. "We must use them and use them means what? Be able to track where money is going. Two, be able to bring citizen oversight of how money is used. And three, audit these receipts," she said. Watch the full event here. PAYMENTS IN THE DIGITAL AGEIn a speech at the recent Singapore Fintech Festival, MD Kristalina Georgieva laid out the four cornerstones of payments in the digital age: private sector innovation, public sector involvement, regulatory and legal frameworks, and international cooperation. "Digital payments are not just for the tech-savvy – they have huge implications for the whole world," she said. "So we must tread courageously – and carefully. We must ensure that payments evolve to meet user needs while remaining safe and resilient. That’s at the micro level. And at the macro level, we need to foster a financial sector and international monetary system that are efficient and trusted, equitable and inclusive, and still dynamic." BATTLING COVID'S UNEQUAL EFFECTIMF Chief Economist Gita Gopinath made the case that the IMF is adapting to lessons learned from the past as it looks to support countries impacted by the COVID-19 pandemic. She joined Sierra Leone's Finance Minister Jacob Jusu Saffa, Independent Commission for the Reform of International Corporate Taxation's Jayati Ghosh, Development Finance International's Matthew Martin, and Oxfam International's new Executive Director, Gabriela Bucher to discuss how governments can stop COVID-19 from increasing inequality. "The IMF has moved along in the sense of adapting to the lessons that have been learned," she said at the virtual event on Monday hosted by Oxfam International. "And if you look at the more recent programs over the last several years, you will see that there's a great emphasis on ensuring that there is social protection." Top of mind: Ensuring the availability of vaccines worldwide should be a priority. Wealthier countries may end up with extra doses. "There has to be a mechanism to ensure that these excess vaccines go very quickly to the needy countries," Gopinath said. "So for me, that's top of mind, because right now ... ending the pandemic sooner would help bring back recoveries much faster everywhere in the world." Watch the full event here. TACKLING DEBTDebt looms large in the current policy debate. The issue was the subject of an event this week featuring Ceyla Pazarbasioglu, director of the IMF’s Strategy Policy and Review Department; World Bank Chief Economist Carmen Reinhart; Anna Gelpern of Georgetown University; and Ken Rogoff of Harvard University. “The bottom line is timing matters, whether countries preemptively restructure their debt or restructure until a default occurs ... has important implications,” said Pazarbasioglu. “Of course, the key question is how to design an architecture, debt architecture, to help incentivize pre-emptive debt restructuring so that we can ensure better outcomes.” Considerations for debt restructuring was discussed along with changes in creditor composition and implications for creditor coordination as well as debt transparency. The discussion also marked the release of the update on the Joint IMF-World Bank Multipronged Approach to Address Debt Vulnerabilities. Watch the full event here. LOWER FOR LONGER Central banks have played a key role in the response to the COVID-19 shock, but taking action to provide more stimulus today should be weighed against potential financial stability risks down the road, Tobias Adrian, Financial Counsellor and head or the IMF's Monetary and Capital Markets Department, writes in a blog posted this week. The blog builds on a recent paper looking at the risks posed by low interest rates over a long period. "A range of policies, including forward guidance and asset purchases, was deployed to spur a strong recovery in employment after the Global Financial Crisis. But a sharp decline in the neutral rate of interest reduced the scope to counter low inflationary pressures. Even with interest rates very low out the yield curve, inflation remained chronically low and appeared to be pulling down long-run inflation expectations in many economies. This is a concern because it would put downward pressure on nominal yields and further erode policy space," he writes. Read the full blog here. CHANGES IN CENTRAL BANK RESERVE CURRENCIESThe US dollar and euro still dominate reserve currencies held by central banks around the world, but could that trend change? The answer is that it could, but right now it's only happening at a glacial pace, the IMF's Alina Iancu, Neil Meads, Martin Mühleisen, and Yiqun Wu write in a blog this week. The blog, based on a new IMF staff paper, found that given the dollar’s (and to some extent, the euro’s) international dominance, to date, any shifts in central bank reserve holdings have been minimal. The paper also found that financial links seem to be a key driver of reserve currency holdings, and increasingly so in the last decade. This would suggest that, as long as the dollar continues to dominate global finance and trade, its dominance as a reserve currency looks set to endure. But, just as slow-moving glaciers can sometimes unexpectedly surge forward, the currency composition of reserve holdings has the potential to undergo a sudden, unexpected, and accelerated transformation. Read the full blog here. CENTRAL AMERICA'S DOUBLE CHALLENGEThe pandemic and natural disasters are posing twin challenges to economic destruction in Central America, according to a new Country Focus article from the IMF's Patricia Alonso-Gamo, Manuela Goretti, and Inci Otker. Countries have taken prompt containment measures, with the strictest enforced in the Northern Triangle of El Salvador, Guatemala, and Honduras, amid inadequate testing and tracing capacities and limited access to basic health services. Multiple natural disasters have also added to the economic destruction and increased the risk of worsening the pandemic: two tropical storms in June in El Salvador; a severe drought in Honduras; and two recent back-to-back category 4 hurricanes that hit Nicaragua, Guatemala, and Honduras particularly hard. Fiscal consolidation, ambitious structural reforms, attention to the financial system will be required as the region seeks to recover from the crisis. Read the full article here. WHAT'S NEW IN FINTECHWhat are the transformative aspects of recent financial innovation that can uproot finance as we know it? Which new policy challenges will the transformation of finance bring? A blog by IMF and ECB staff distinguishes between two areas of financial innovation. One is information: new tools to collect and analyze data on customers, for example for determining creditworthiness. Another is communication: new approaches to customer relationships and the distribution of financial products. We argue that each dimension contains some transformative components. REAL TIME DATA SHOWS WIDENING GENDER GAPTourism, hospitality, and other contact-intensive sectors with higher shares of female workers came to a dead stop shortly after COVID-19 infections started to spread. In our latest issue of Finance & Development, the IMF's Wenjie Chen shows how the online job posting analysis from 22 countries shows the extent of the pandemic's damage, especially to women. Women have fared worse than men even in those jobs that are more conducive to working from home, she writes in her piece "Disparities in Real Time." As the labor market readjusts to the new work environment, the study using real-time data on job listings reveals women–across all sectors, continue to drop out of the workforce at an alarming rate. Listen to an IMF podcast with Chen on her article. THE GROWING PRECARITY OF WORKThe growing precarity of work is the subject of another IMF podcast with two other F&D authors, Sabina Dewan, president of JustJobs Network, and International Labor Organization economist Ekkehard Ernst. Read their F&D piece "Rethinking the World of Work" where they argue that the "new normal" of informal work driven by robots and automation isn't really new at all, and that shifting demographics and technology were upending labor markets long before the COVID-induced lockdowns. IMF LENDINGCheck out our global policy tracker to help our member countries be more aware of the experiences of others in combating COVID-19. We are also regularly updating our lending tracker, which visualizes the latest emergency financial assistance and debt relief to member countries approved by the IMF’s Executive Board. To date, 78 countries have been approved for emergency financing, totaling over US$31 billion. Looking for our Q&A about the IMF's response to COVID-19? Click here. We are also continually producing a special series of notes—more than 50 to date—by IMF experts to help members address the economic effects of COVID-19 on a range of topics including fiscal, legal, statistical, tax and more. FINAL THOUGHTThank you again very much for your interest in the Weekend Read. We really appreciate your time. If you have any questions, comments or feedback of any kind, please do write Sincerely, | 
