WASHINGTON: The International Monetary Fund announced Wednesday the creation of a new short-term liquidity facility for countries battered by the global financial crisis.
The IMF executive board approved the creation of the emergency tool Wednesday "to establish quick-disbursing financing for countries with strong economic policies that are facing temporary liquidity problems in the global capital markets," the 185-nation lending institution said in a statement.
The managing director of the IMF, Dominque Strauss-Kahn, welcomed the board's approval of the new program.
"The ongoing turmoil in global capital markets has led to significant liquidity difficulties for some emerging market countries, even those that have maintained sound macroeconomic frameworks and have sustained histories of market access," he said at a news conference.
Strauss-Kahn said the new lending facility program fills a gap in the IMF's "toolkit of financial support," which includes loan facilities for countries that require both financing and policy adjustment.
This new initiative addresses the needs of countries facing a cash squeeze despite generally sound economies, he said.
Strauss-Kahn underlined that that the IMF was committed to promoting a coordinated and cooperative approach to dealing with the current global financial crisis that is threatening to tip the world economy into recession.
"Exceptional times call for an exceptional response," he said.
"The Fund is responding quickly and flexibly to requests for financing. We are offering some countries substantial resources on an expedited basis, with conditions based only on measures absolutely necessary to get past the crisis and to restore a viable external position," he said.
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