The IMF created on Wednesday a new emergency lending tool to help economically “sound” countries squeezed by a cash crunch amid the global financial crisis.
The IMF executive board approved the creation of the short-term, quick-response financing “for countries with strong economic policies that are facing temporary liquidity problems in the global capital markets,” the multilateral institution said.
IMF managing director Dominique Strauss-Kahn said the new short-term liquidity facility fills a gap in the institution’s array of financial supports which until now had focused on countries that require both financing and policy adjustment.
“Exceptional times call for an exceptional response,” he said at a news conference.
“The ongoing turmoil in global capital markets has led to significant liquidity difficulties for some emerging market countries, even those that have maintained sound macroeconomic frameworks and have sustained histories of market access,” he said.
For those countries that, despite strong initial macroeconomic positions and policies, are facing short-term liquidity pressures, he said, “this new facility addresses that gap in the Fund’s toolkit of financial support.”
He welcomed the announcement earlier on Wednesday that the US Federal Reserve has offered new credit “swap” lines of credit with central banks in Brazil, Mexico, South Korea and Singapore to help those countries ease a credit squeeze.
He noted the swap lines are designed “to mitigate the spread of difficulties in obtaining foreign currency funding in fundamentally sound and well-managed economies.”
Strauss-Kahn underlined that the IMF was committed to promoting a coordinated and cooperative approach to battling the worst financial crisis since the 1930s Great Depression, which is threatening to tip the world economy into recession.
“The Fund is responding quickly and flexibly to requests for financing. We are offering some countries substantial resources on an expedited basis, with conditions based only on measures absolutely necessary to get past the crisis and to restore a viable external position,” he said.
The new short-term lending facility will provide large, quick-disbursing financing, using existing IMF resources, “to countries with strong policies and a good track record,” the IMF said.
The 185-nation institution said potential recipients of the new facility had to have sound policy histories, access to capital markets and sustainable debt burdens.
Eligible countries can withdraw up to 500 percent of their IMF quota, for a three-month period, up to three times during any 12-month period.
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College