IMF Board Approves Record $21 Billion Stand-By To Support Korea's Adjustment Program

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Page 385

On December 4, the IMF Executive Board approved a $21 billion stand-by credit for Korea in support of that country's economic adjustment program (see press release, page 388). This arrangement, which was negotiated with unprecedented speed, was the largest ever approved for an IMF member, exceeding the $17.8 billion credit approved for Mexico in February 1995 (see IMF Survey, February 20, 1995). It was part of a major international support package, involving also the World Bank and the Asian Development Bank, as well as bilateral lenders. The IMF's support for Korea's economic reform program marks the latest in the institution's continuing efforts to assist the beleaguered economies of East Asia. In August, the IMF approved a $3.9 billion package for Thailand supplemented by a $12.7 billion support package coordinated with other interested countries and multilateral institutions (see IMF Survey, September 17); and in November, the IMF approved a $10.1 billion stand-by credit for Indonesia as a major element in international assistance totaling some $23 billion (see IMF Survey,November 17).

As IMF First Deputy Managing Director Stanley Fischer said in a press briefing on December 5 (see page 386), the overwhelming speed and severity with which the financial crisis in Korea unfolded imparted a sense of urgency to the negotiations, which...