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IMF creates a food loan facility


THE International Monetary Fund (IMF) board has approved a new lending facility for countries faced with acute food insecurity.

This was announced by the lender’s managing director Kristalina Georgieva, this weekend.

Georgieva said this will fall under the emergency financing instruments – the Rapid Credit Facility and Rapid Financing Instrument – and will be called a ‘Food Shock Window’.

The new financing window will be open for one year and will provide additional access to emergency financing to countries that have urgent balance of payments needs and are suffering from acute food insecurity, a sharp food imports shock, or from a cereals export shock, she said.

“For some time now, the combination of climate shocks, the pandemic and regional conflicts has disrupted food production and distribution, driving up the cost of feeding people and families. Russia’s war in Ukraine has pushed the price of food and fertilisers even higher, hurting food importers and some exporters.

“As a result, a food crisis is spreading around the globe, with a record 345 million people whose lives and livelihoods are in immediate danger from acute food insecurity,” said Georgieva.

The newly established Food Shock Window will provide an additional line of defence after grants and concessional financing.

“We have worked extensively and expeditiously with our members and staff to finalise the proposal for the new Food Shock Window. At a time of such need and suffering, I am grateful to our membership and proud that the fund has come together and responded so swiftly. We have worked with our members to secure additional channelling of special drawing rights, which can help provide support to low-income countries through this new food shock window,” she said.

The IMF is working with the World Bank Group, World Food Programme, and the World Trade Organisation on this new financing window. The World Bank is also implementing its US$30 billion programme to respond to the food security crisis and front loading resources from the IDA20 Crisis Response Window.

In addition to available financing, governments are also encouraged to urgently re-examine their agricultural trade and market interventions, such as subsidies and export restrictions, to identify and minimise distortions.

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