IMF offers USD 100 bn loan to countries facing financial crisis

The International Monetary Fund will offer as much as USD 100 billion in a new kind of loan to countries that are battered by the financial crisis, making available new cash to help ease the world credit crisis.

The new three-month loans, aimed at economies the IMF judges to be troubled but basically sound, wouldn't require countries to make the often severe changes in their policies that the IMF has demanded for decades, a media report said on Thursday.



That makes it potentially easier for crisis-hammered countries such as Mexico, Brazil and South Korea -- which the IMF judges to have basically sound economic policies – to shore up cash reserves, their currency, and their ability to help ailing companies as shaken foreign investors withdraw, a US Journal said.



Those countries, it noted, have shunned the IMF because of the strings attached to the loans, which often force sharp budget cuts or interest-rate increases.



The conditions are designed to help governments save money and pay for necessary

imports, but they also often deepen an economic downturn, making the IMF deeply unpopular around the world.



Now it essentially is dividing developing countries into an A-list of nations that qualify for loans without strings, and a B-list of everyone else, the Journal said.



The new programme, which will use up to about half the IMF's resources, represents a big break from such requirements. "Exceptional times call for an exceptional response," it quoted IMF managing director Dominique Strauss-Kahn as saying.