IMF discusses expanding emergency aid to counter rising food prices

The International Monetary Fund (IMF) is looking for ways to provide emergency financing to countries facing food price shocks due to the Ukraine war. The measures will be discussed at Monday’s executive board meeting and the plan which has not been previously disclosed, will be presented at an informal board meeting.

This would allow the IMF to help Ukraine and other countries hit hard by the Russian war in Ukraine without imposing the conditions required in regular financing programmes, sources told Reuters. The size and scope of the measures is still unclear.

The sources added that a formal vote is expected to issue before the Fund’s annual meetings in October to support the procedure which was put in place by IMF’s experts in recent months.

If this approved it would provisionally rise existing access limits and allow all member countries to borrow up to an additional 50 percent of their share under the IMF’s Rapid Financing Instrument.

Noteworthy, that food prices have skyrocketed around the world after the war began due to supply routes being closed, sanctions and other trade restrictions.

Many African countries and other poor nations suffering food shortages, but it still unknown how many countries would seek the additional financing relief.

In March, IMF has approved $1.4 billion in emergency financing for Ukraine to meet the urgent spending needs and reduce the impact of the war. Ukrainian economy is expected to decrease by 35 percent this year.