IMF programmes helping emerging markets tackle financial crisis

September 28, 2009 06:29 pm | Updated November 17, 2021 06:50 am IST - Washington

President of the IMF Dominique Strauss-Kahn arrives for the G20 Finance Ministers' Summit at London. Photo: AP

President of the IMF Dominique Strauss-Kahn arrives for the G20 Finance Ministers' Summit at London. Photo: AP

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.

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

"... Major challenges remain, including the timely unwinding of fiscal and monetary stimulus, adjustment to external competitiveness factors and fixing bank balance sheets,” it added.

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.