## Press Release: IMF Creates Short-Term Liquidity Facility for Market-Access Countries

_IMF News, October 29, 2008_

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## Bibliographic details
- Published: October 29, 2008

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### Overview
- The Executive Board of the International Monetary Fund (IMF) approved the creation of the Short-Term Liquidity Facility (SLF) to provide quick-disbursing financing for countries with strong economic policies facing temporary liquidity problems in global capital markets.
- Announcement date in source: October 29, 2008.
- Purpose is to address liquidity pressures in market-access countries that have sound macroeconomic frameworks and sustained histories of market access, but are experiencing short-term funding difficulties due to turmoil in global capital markets.

### Rationale and policy context
- The SLF fills a gap in the Fund's toolkit between existing loan facilities (which are "fundamentally used for countries that require both financing and policy adjustment") and the needs of countries that are fundamentally sound but temporarily illiquid.
- Quotes:
  - "I am very pleased to announce that the Executive Board has approved the establishment of a new facility for market access countries—the Short-Term Liquidity Facility," stated Mr. Dominique Strauss-Kahn, Managing Director of the IMF.
  - "The ongoing turmoil in global capital markets has led to significant liquidity difficulties for some emerging market countries, even those that have maintained sound macroeconomic frameworks and have sustained histories of market access."
  - "Exceptional times call for an exceptional response," Mr. Strauss-Kahn said.
  - "We are offering some countries substantial resources on an expedited basis, with conditions based only on measures absolutely necessary to get past the crisis and to restore a viable external position."
  - "The IMF will respond to this crisis with all the necessary financing. We are prepared to use our own resources and to work with others to generate additional resources to make sure that countries have the money they need to restore confidence and maintain stability."

### Outline of the Short-Term Liquidity Facility (SLF)
- Purpose:
  - "Establishes a facility through which large, upfront, quick-disbursing short-term financing, using existing IMF resources, can be provided to countries with strong policies and a good track record but which are facing temporary liquidity problems arising from developments in external capital markets."
- Terms:
  - Disbursement of Fund resources can be up to 500 percent of quota.
  - Maturity: three-month maturity.
  - Drawing limit: Eligible countries are allowed to draw a maximum of three times during any 12-month period.
- Eligibility:
  - Countries with track records of sound policies, access to capital markets and sustainable debt burdens.
  - "Policies should have been assessed very positively by the IMF in its most recent Article IV discussions."
  - Given emphasis on past performance, financing is made available without the standard phasing, performance criteria, monitoring, and other conditionality of a Fund arrangement.
  - Borrowers are expected to continue their commitment to maintain a strong macroeconomic policy framework.

### Coordination with other liquidity initiatives
- The IMF welcomed the announcement by the U.S. Federal Reserve, the Banco Central do Brasil, the Banco de México, the Bank of Korea, and the Monetary Authority of Singapore of temporary reciprocal currency arrangements (swap lines).
- These independent facilities, like those already established with other central banks, are "designed to help improve liquidity conditions in global financial markets and to mitigate the spread of difficulties in obtaining foreign currency funding in fundamentally sound and well managed economies."

*Press Release: IMF Creates Short-Term Liquidity Facility for Market-Access Countries (October 29, 2008).*

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## References

- [Republic of Korea and the IMF](http://www.imf.org/external/country/KOR/index.htm)
- [Singapore and the IMF](http://www.imf.org/external/country/SGP/index.htm)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [Transcript of a Press Conference on Short-Term liquidity Facility](https://www.imf.org/external/np/tr/2008/tr081029.htm)
- [Webcast on Short-Term liquidity Facility](https://www.imf.org/external/mmedia/view.asp?eventID=1300)
- [A New Facility for Market Access Countries](https://www.imf.org/external/pp/longres.aspx?id=4299)
- [IMF to Launch New Facility for Emerging Markets Hit by Crisis](https://www.imf.org/external/pubs/ft/survey/so/2008/POL102908A.htm)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr08262_