IMF confirms talks on expanding emergency aid to food shocks

The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. REUTERS/Yuri Gripas

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WASHINGTON, Sept 13 (Reuters) – The International Monetary Fund (IMF) confirmed on Tuesday that it is considering expanding its lending toolkit to help countries hit by the food crisis, including through a new ” food shock window”, which would provide emergency relief. funding.

The plan, first reported by Reuters on Monday, would see the IMF increase lending to countries struggling with balance-of-payments problems caused by the food crisis sparked by Russia’s war on Ukraine and the United States. global inflation following the COVID-19 pandemic. Read more

IMF board members discussed the proposal in an informal session on Monday.

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IMF spokesman Gerry Rice said the fund, which has lent more than $268 billion to 93 countries since the start of the pandemic, was using all the tools available to support its members and examining “all options to improve our toolkit, including to help countries affected by the food crisis.

In a statement to Reuters, he said the council had just started informal discussions on “one of these proposals: a new food shock window under our emergency funding arrangements.”

He said further discussions were planned with the board to secure formal approval of the changes.

Rice said the fund had provided $27 billion in loans to 57 low-income countries and continued to encourage its member countries to “contact us early to get the financial support they need.”

The proposal discussed on Monday would temporarily increase existing access limits and allow all member countries to borrow up to an additional 50% of their IMF quota under the IMF’s Rapid Financing Instrument, countries low-income earners can tap the quick credit facility, sources close to the plan said.

Board members were generally supportive of the meeting, and a formal vote backing the measure is likely before the Fund’s annual meetings in October, they said.

Food prices – already hit by inflation – surged around the world after the start of the war in Ukraine due to the blocking of supply routes, sanctions and other trade restrictions, although a A UN-brokered deal that allowed the resumption of grain exports from Ukrainian ports last month has started to help improve trade flows and lower prices in recent weeks.

Many African and other poor countries suffering from food shortages and acute famine called for increased funds, but it was not immediately clear how many countries would be asking for the additional financial assistance.

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Reporting by Andrea Shalal; Editing by Aurora Ellis

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