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IMF will modify regulations to finance countries with high uncertainty

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The IMF will target those countries with “urgent” needs. They seek to help with balance of payment problems, among others.

The executive board of the International Monetary Fund (IMF) approved modifications in the regulations of your loansin regards to the financial backing of the countries, reducing demands in cases where there is a “exceptionally high uncertainty”reported this Saturday the credit institution.

Based on these changes, in these unpredictable contexts, the Fund will be able to “provide emergency financing so that countries can meet urgent needs in their balance of paymentsas long as certain guarantees are presented”.

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In practice, it seeks to establish a modality that allows approve faster and with fewer conditions an agreement of Emergency Superior Credit Tranche (UCT) which -generally- requires, prior to granting, a program designed by the Fund to resolve balance of payment problems and restore external viability in the medium term.

“The changes adopted will allow correct key barriers when designing a UCT program in the case of exceptional situations high uncertainty”, the Fund stated in a statement. These contexts, according to the agency, include “external shocks that are beyond the control of the authorities of the countries and the scope of their economic policies”.


The directors also agreed that the assessment about whether a country is indeed in a situation of “high uncertainty” should have a uniform treatment in all cases.

IMF will take new measures on financing

When granting these credits, the two scenariosone with downside risks and the other upside for ensure that the program can work in both cases. Once the exceptional situation has dissipated, the program will continue its course under a single baseline scenariothey specified from the Fund.


In practice, these changes could favor Ukrainea country involved for a year in a war conflict with Russia and that it is negotiating a program with the Fund to be able to sustain your economy and start with the reconstruction tasks.


He assistance package that is negotiating, in this case, it would reach the US$15,000 million and would seek to serve as a catalyst to receive international financing from other countries and organizations, said the Bloomberg agency. If granted, it would be the First time in history that the IMF grant him a full credit program still country at war.

The country’s goal for this year is to achieve up to US$38,000 million from external donors and thus alleviate a deficit which reaches approximately US$3 billion monthly.

Source: Ambito

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