IMF to launch new framework to counter currency crisis – Nikkei

The International Monetary Fund (IMF) will introduce a framework to mitigate currency crises by pre-approving easy access to dollars without requiring the onerous structural reforms that have marked past rescue programs, the Nikkei Asian Review reports.

The IMF hopes the novel approach helps emerging economies avert currency crises.

Key Quotes:

“This arrangement is intended mainly to deal with capital-account crises -- currency collapses triggered by severe capital flight.”

“With money likely starting to return to the U.S. as the Federal Reserve pivots from monetary easing, the IMF worries that corresponding outflows from emerging economies could drag down their currencies.” 

“The IMF will evaluate potential borrowers under normal conditions, looking at such data as their current-account and fiscal balances, and let them join the framework if they are deemed sufficiently healthy. “