New IMF facility to favor strong performing economies

    Only countries with strong economic performance, sustainable debt and transparent reporting mechanisms will benefit from a proposed crisis facility under the International Monetary Fund, according to a draft on the new initiative. The paper defended the need for such an instrument, saying: “As recent volatility in equity, debt, and currency markets demonstrates, it is prudent to consider the potential needs of members in periods when market access may be more constrained.” In 2003, the IMF proposed the creation of a similar initiative called the Contingent Credit Line, but was scrapped when no one took part in the program. Potential candidates shied away from the facility for fear that the market will regard their application as an indication of weakness in their economies. (Source: IMF targets strong economies with crises loan-draft/Reuters)

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