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So Much for “Rules-Based” Policy at the IMF
mises.org / Paul-Martin Foss / DECEMBER 17, 2015
According to the website of the International Monetary Fund (IMF), the IMF’s purpose is:
to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other.
One of the ways in which the IMF does that is by providing loans to member countries that are experiencing momentary difficulties. One of the IMF’s lending rules had been that the Fund would not continue to support countries that failed to repay official creditors (i.e. other governments). Recently the IMF changed those rules so that it may continue to support a country that defaults on a payment to one of its official creditors. The beneficiary of that rule change? Ukraine.
And which country is Ukraine likely not to repay? Russia. The Ukrainian government is attempting to restructure its international debt obligations and it still owes Russia $3 billion. While Russia has begun to make overtures to Ukraine in an attempt to overcome the repayment impasse, Ukraine appears to be digging in its heels. While some speculate that the Russian government will eventually restructure the debt Ukraine owes it, the IMF apparently wanted to make sure that if Ukraine does end up defaulting on its debt to Russia that it is still able to receive IMF assistance.
The post So Much for “Rules-Based” Policy at the IMF appeared first on Silver For The People.
Source: http://silveristhenew.com/2015/12/19/so-much-for-rules-based-policy-at-the-imf/
