International Monetary Fund
To complement existing balance-of-payment support programmes, the International Monetary Fund (IMF) has announced the creation of a new Short-Term Liquidity Facility (SLF) for countries with access to international capital markets. · Purpose: Create a facility to provide large upfront disbursements of short-term financing;
· Terms: Disbursements may be up to five times the country’s quota in the Fund, and will have a three-month maturity. Eligible countries may draw on these lines of credit up to three times during a 12-month period;
· Eligibility: Countries with a good track record of sound policies (based on the periodic assessments conducted by the Fund) and sustainable debt burdens may qualify. The credits will be disbursed promptly and will not be subject to the procedures and conditionalities that normally apply to the Fund’s other programmes.
United States Federal Reserve
The Federal Reserve has established temporary liquidity swap facilities with the central banks of Brazil, Mexico, Republic of Korea and Singapore to provide external liquidity in amounts of up to US$ 30 billion in each case.
Inter-American Development Bank
The Inter-American Development Bank (IDB) announced new quick-disbursing credits to the tune of US$ 6 billion to help countries to maintain economic growth and employment in the midst of the credit crunch.
The Liquidity Program for Growth Sustainability is designed to provide financing through intermediary banks to firms in the region that are facing transitory difficulties in accessing interbank credit lines or credit from world financial centres.
The countries that receive financing out of the Bank’s ordinary financial capital can tap into the Liquidity Program. The loan amounts are determined by IDB on a case-by-case basis.
IDB also intends to speed up approval of its loans to finance projects and strengthen social programmes. The objective is to approve a record US$ 12 billion in new loans in 2009, up from about US$ 10 billion in 2008.
If the liquidity facility is fully utilized and the goal for new loan commitments is met, the financing granted in 2009 will amount to about US$ 18 billion. This would represent an 80% increase on the Bank’s current financing in the region.
Andean Development Corporation
The Andean Development Corporation (CAF) recently announced the establishment of a contingency line of credit for US$ 1.5 billion.
The Corporation has also pledged to increase the lines of credit set up for the region’s financial system from US$ 1.5 billion to US$ 2 billion.
These mechanisms, in conjunction with its traditional loan operations and other financing modalities, will bring total CAF loan commitments to US$ 16 billion for the period 2008-2009.
Latin American Reserve Fund
The Latin American Reserve Fund (LARF) has also offered to make available, with immediate effect, liquidity credit lines totalling US$ 1.8 billion. The Fund could add another US$ 2.7 billion in the coming months through its contingency lines for balance-of-payments support, depending on how market conditions evolve.
The World Bank and its affiliates
The World Bank is in a position to increase its support to countries with new commitments of up to US$ 100 billion between 2009 and 2011.
The International Development Association (IDA) can provide US$ 42 billion to support countries seeking to enter the capital market and to assist countries experiencing difficulties due to falling commodity prices and weaker remittances.
Between 2009 and 2011, the group will provide support to the private sector, through the International Financial Corporation (IFC), for a total of US$ 30 billion. The initiatives envisaged are as follows:
· Doubling the Global Trade Finance Program (from $ 1.5 billion to $3 billion).
· Investing US$ 1 billion, through IFC, in the global share fund for bank recapitalization. Japan has already pledged US$ 2 billion, and other investors are expected to invest similar amounts.
· Implementing a credit line for privately funded, financially viable infrastructure projects to support them in the renewal of commitments and recapitalization in case of financial constraints.
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official information.