IMF said it is establishing a flexible liquidity line that would act as “insurance against future shocks and as a short-term liquidity window to address the needs of crisis bystanders”.
It would be available for six months to countries with relatively good policies that are facing short-term balance of payments needs.
Access under the six-month arrangement could be as much as 500 per cent of a member’s quota and come with few conditions.
The Precautionary and Liquidity Line could also be used for longer programs under 12- to 24-month arrangements with access up to 1,000 per cent of a member’s quota, with more conditions attached. The IMF did not say which nations would qualify.
There will also be a rapid financing instrument for countries hit by “exogenous shocks”, such as political turmoil like the Arab Spring.