IMF eyes expanded access to emergency aid for food shocks
Published: Sep 12, 2022 06:28 PM
The International Monetary Fund (IMF) was looking for ways to provide emergency funding to countries facing war-induced food price shocks and would discuss measures at an executive board meeting on Monday, sources familiar with the matter told Reuters.

The plan, which has not previously been reported, would be presented at an informal board session.

It would allow the IMF to help countries hit hard by the 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 percent of their IMF quota under the IMF's Rapid Financing Instrument, and the Rapid Credit Instrument that serves low-income countries, the sources said.

Food prices surged worldwide after the start of the war. Blocked supply routes, sanctions and other trade restrictions have seen food prices surge worldwide since the conflict began, although a UN-brokered deal that allowed resumed exports of grain from Ukrainian ports in August has begun to help improve trade flows and lower prices in recent weeks.

The IMF projected in July that inflation will reach 6.6 percent in advanced economies in 2022, and 9.5 percent 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.