IMF Eyes Expanded Access to Emergency Aid for Food Shock
The International
Monetary Fund is looking for ways to provide emergency funding to countries
facing war-induced food price shocks and will discuss measures at an executive
board meeting on Monday, sources familiar with the matter told Reuters.
The plan, which has not
previously been reported, will be presented at an informal board session.
It would allow the IMF
to help Ukraine and other countries hit hard by Russia’s war in Ukraine without
imposing conditions required in a regular fund program, said the sources, who
asked not to be named since the matter is still under review. The size and
scope of the measures was not yet clear.
A formal vote backing
the measure — which has been developed by the IMF staff in recent months — is
expected before the Fund’s annual meetings in October, the sources said.
If approved, it would
temporarily increase existing access limits and allow all member countries to
borrow up to an additional 50% of their IMF quota under the IMF’s Rapid
Financing Instrument, and the Rapid Credit Instrument that serves low-income
countries, the sources said.
"The concept is simple,
but it could help many countries,” said one of the sources.
Responding to need
Food prices surged
worldwide after the start of the war given blocked supply routes, sanctions and
other trade restrictions, although a U.N.-brokered deal that allowed resumed
exports of grain from Ukrainian ports last month has begun to help improve
trade flows and lower prices in recent weeks.
The Washington-based
lender projected in July that inflation will reach 6.6% in advanced economies
this year, and 9.5% in emerging market and developing economies, posing a
"clear risk” to current and future macroeconomic stability.
Many African countries
and other poor nations suffering food shortages and acute hunger have clamored
for increased funds, but it was not immediately clear how many countries would
seek the additional financing aid.
VOA
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