The International Monetary Fund is looking for ways to provide emergency funding to countries facing war-induced food price shocks and will discuss measures at an executive board meeting on Monday, sources familiar with the matter told Reuters.
The plan, which has not previously been reported, will be presented at an informal board session.
It would allow the IMF to help Ukraine and other countries hit hard by Russia’s war in Ukraine without imposing conditions required in a regular fund program, said the sources, who asked not to be named since the matter is still under review. The size and scope of the measures was not yet clear.
A formal vote backing the measure — which has been developed by the IMF staff in recent months — is expected before the Fund’s annual meetings in October, the sources said.
If approved, it 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, and the Rapid Credit Instrument that serves low-income countries, the sources said.
“The concept is simple, but it could help many countries,” said one of the sources.
Responding to need
Food prices surged worldwide after the start of the war given blocked supply routes, sanctions and other trade restrictions, although a U.N.-brokered deal that allowed resumed exports of grain from Ukrainian ports last month has begun to help improve trade flows and lower prices in recent weeks.
The Washington-based lender projected in July that inflation will reach 6.6% in advanced economies this year, and 9.5% in emerging market and developing economies, posing a “clear risk” to current and future macroeconomic stability.
Many African countries and other poor nations suffering food shortages and acute hunger have clamored for increased funds, but it was not immediately clear how many countries would seek the additional financing aid.