The International Monetary Fund (IMF) may be providing short-term dollar loans in connection with the corona crisis.
These are for countries that are short of dollars but do not have enough Treasury bills to participate in a US Federal Reserve program designed explicitly for this problem. Bloomberg news agency reports this based on insiders.
The Fed program in question allows foreign central banks to exchange certain debts for dollars temporarily.
According to Bloomberg, the IMF’s initiative to supplement the Fed program has the support of the United States government and can take effect within weeks. The United States is the largest shareholder of the IMF.
The IMF is projecting a global recession worse than during the 2008 financial crisis. Emerging economies are estimated to need at least $ 2500 billion in aid. That is a lot of money, also from an IMF perspective.
Hence, work is underway on alternative ways of providing aid to countries affected by the corona crisis. IMF CEO Kristalina Georgieva previously stated that she wants to present a substantial package of measures during the fund’s large spring meeting. That meeting will take place next week via a video conference.
The Fed is also continuing to work on support for the US economy itself, which has also been walloped by the virus outbreak.
For example, the US central bank umbrella has announced the launch of a new program to boost lending to small businesses in the US. The Fed will release more details about this settlement later this week.