IMF announces 100 billion emergency fund; Argentina out
The International Monetary Fund (IMF) is creating an emergency fund for emerging market economies to help them weather the global credit crisis. The Group of 24 developing countries, which includes nations from Latin America, Asia and Africa, had requested such a development earlier this month.
IMF officials said a maximum of around 100 billion US dollars would be available. "The IMF will respond to this crisis with all the necessary financing," said IMF boss Dominique Strauss-Kahn. "We are prepared to use our own resources and to work with others to generate additional resources to make sure that countries have the money they need to restore confidence and maintain stability," the IMF managing director said. The package will be available to pre-approved countries who will be able to access a high level of funding with no pre-conditions once they have been approved. Nations will be able to borrow up to five times their IMF quota, which is broadly determined by size of their economy. Usually countries are only able to access three times their quota. But Argentina will not be able to tap the new fund, said the IMF boss. Asked whether the South American nation would qualify, Mr Strauss-Kahn said the "conditions include having a very strong track record and strong policies in the past" for at least some period of time. "I'm afraid the country you mentioned... will not be eligible for the facility," he added. The news comes a day after Hungary was granted a multi-billion dollar rescue package by the IMF, the EU and the World Bank. The deal, worth 25 billion is intended to help Hungary cope with the ongoing effects of the global financial crisis. It follows similar measures taken by the IMF to prop up the economies of Ukraine and Iceland. The fund is also in talks with Pakistan and Belarus about loans.