IMF PROGRAMMES HELPING EMERGING MARKETS TACKLE FINANCIAL CRISIS

Deccan Herald
Washington, Sep 28

The International Monetary Fund has said the agency’s various efforts,
including large and "timely financing", have helped many of the
emerging markets tackle the financial turmoil.

President of the IMF Dominique Strauss-Kahn arrives for the G20 Finance
Ministers’ Summit at London. Photo: APAsserting that many nations,
which received IMF funds, have generally avoided banking crises,
the multilateral lending agency said fiscal policy in many instances
was adjusted in accordance with evolving conditions.

"The Fund-supported programmes are delivering the kind of policy
response and financing needed to help cushion the blow from the worst
crisis since the 1930s," the agency said in its ‘Review of Crisis
Programmes’ covering 15 countries.

In recent months, IMF has sanctioned billions of dollars to many
countries to boost their efforts to tide over the financial storm.

"Serious challenges remain, especially restoring sustained growth
in output and employment, but there are encouraging signs of
stabilisation," IMF’s Managing Director Dominique Strauss-Khan said.

The report said the "general avoidance of banking crises in programme
countries thus far is remarkable," especially as many countries in
Central and Eastern Europe, slipped into such a turmoil due to an
"externally-financed credit boom".

The countries covered in the review are Armenia, Belarus, Bosnia &
Herzegovina, Costa Rica, El Salvador, Georgia, Guatemala, Hungary,
Iceland, Latvia, Pakistan, Mongolia, Romania, Serbia and Ukraine.

Apart from "large and timely financing", the lender said that more
focused conditionality and stronger country ownership helped in
avoiding many of the past problems in tackling the crisis.

According to the report, large financial packages were mobilised and
that financing has been used more to meet actual funding constraints
of the private and public sectors, as compared to replenishing central
bank reserves.

However, port noted that many challenges including unwinding of
stimulus packages and fixing the balance sheets of banks, still remain.

From: Emil Lazarian | Ararat NewsPress