New IMF short-term loan for Third World
The International Monetary Fund (IMF) said on Thursday it will create a new short-term lending facility to channel funds quickly to emerging markets that have a strong track record.business Updated: Oct 30, 2008 22:56 IST
The International Monetary Fund (IMF) said on Thursday it will create a new short-term lending facility to channel funds quickly to emerging markets that have a strong track record but need rapid help during the current financial crisis to get them through temporary liquidity problems.
In a press announcement, the IMF said the Short-Term Liquidity Facility (SLF) is designed to help emerging market countries with a track record of sound policies address the fallout from the crisis.
The new facility, approved by the IMF's Executive Board on October 28, comes with no conditions attached once a loan has been approved and offers large upfront financing to help countries restore confidence and combat financial contagion.
“Exceptional times call for an exceptional response,” IMF Managing Director Dominique Strauss-Kahn said.
“The Fund is responding quickly and flexibly to requests for financing. We are offering some countries substantial resources, with conditions based only on measures absolutely necessary to get past the crisis and to restore a viable external position,” he said.
The IMF has already reached financing agreements with Iceland, Hungary, and Ukraine, and is in advanced talks with several other countries.
The SLF will allow the IMF to help its members at a critical time.
“Even countries that have excellent track records of implementing strong macroeconomic policies have been caught up in the global financial market crisis. They need support, and the IMF is ready to give it,” Strauss-Kahn said.
“The SLF will support the authorities' efforts to reduce the impact of the crisis,” he said.