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IMF to adopt new scheme to offer short-term dollar funds - Japanese government source

Reuters  |  TOKYO 

TOKYO (Reuters) - The International Monetary Fund will introduce a new facility to give countries swift access to short-term dollar funds to guard against a potential financial crisis, a Japanese source with direct knowledge of the matter said on Tuesday.

The move would come amid concern held by some analysts that the Federal Reserve's monetary tightening path could trigger a withdrawal of funds from emerging Asian economies and disrupt financial markets.

Under the new scheme, member countries that undergo a preliminary review can tap the for short-term dollar funds they can use to battle any speculative attack on their currencies, the source said on condition of anonymity due to the sensitivity of the matter.

The new facility has been under consideration at the to strengthen safe-guards against abrupt rises in market volatility. Its creation will be formally decided at the IMF's board meeting at the end of this month, the source said.

"The is considering various measures, as it sees the importance of replenishing global safety nets to guard against potential liquidity problems," an official told

The Nikkei newspaper reported earlier on Tuesday the will adopt the new dollar-funding facility that would not set strict conditions on borrowing countries.

(Reporting by Takashi Umekawa and Tetsushi Kajimoto, writing by Leika Kihara; Editing by Shri Navaratnam)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)