G20 nations have agreed to freeze bilateral government loan repayments for low-income countries until the end of the year as part of a plan to tackle the health and economic crises triggered by the coronavirus pandemic and prevent an emerging markets debt crunch.

The group of developed and developing nations also called on private creditors “to participate in the initiative on comparable terms” and asked multilateral development banks, such as the IMF and World Bank, “to further explore the options for the suspension of debt service payments over the suspension period”.

“We support a time-bound suspension of debt service payments for the poorest countries that request forbearance,” the G20 said in a statement after finance ministers held an online meeting on Wednesday. “We agreed on a co-ordinated approach with a common term sheet providing the key features for this debt service suspension initiative.”