Yesterday, the International Monetary Fund confirmed that it was presently holding ongoing discussions with several countries that have requested the IMF’s assistance in light of the present economic crisis, including Iceland, Pakistan, Belarus and Ukraine. Last Monday, Mr. Dominique Strauss-Kahn, the Managing Director of the IMF, issued a formal statement acknowledging similar discussions with the Hungarian government.
Under the IMF’s Emergency Financing Mechanism, the Executive Board has 48 to 72 hours to consider a country’s request for a loan after it receives a report highlighting the country’s economic situation and its proposed lending program. Presently, the IMF’s lending resources include more than $200 billion in reserves. In addition, it can rely upon two borrowing arrangements it has entered into with groups of IMF member countries to draw upon additional resources for lending purposes if necessary.
In his statements regarding possible aid to the Republic of Belarus and Pakistan, Mr. Strauss-Kahn, noted that the amount of financing to be offered to each country under “a Stand-By Arrangement” was yet to be determined. While the conditions of each loan remains unknown, Mr. Strauss-Kahn has acknowledged that in general the conditions related to loans issued during the present crisis “will be fewer and more targeted than in the past.” Several other countries have been reported to appear close to accepting a loan package from the IMF, including Iceland.
On November 15th, the leaders of the Group of 20 countries have been invited by President Bush to meet in Washington D.C to “agree on a broad set of principles for reforming the international financial system.” The IMF has also been invited to take a leadership role in “in preparing lessons from the crisis and how the international financial architecture could be adjusted.”