IMF plans short-term forex swaps to cushion emerging markets

The Intern-ational Monetary Fund (IMF) is working on a proposal to become a more significant lender of dollars, euros and other currencies during times of crisis, the Wall Street Journal said on Wednesday without citing sources. As per the plan, which has been encouraged by the United States. And the G20 countries, the IMF would provide short term foreign exchange swaps to central banks in developing countries to handle financial shocks that leave those nations short of hard currencies.
The move would allow IMF to share the role of a global lender of last resort with the US Federal Reserve, the Journal said. The Fed wants the IMF to set tough standards for the swap lines and ensure that the credit is offered only to emerging nations and not advanced economies, the WSJ said. The plan, if approved, may also require the IMF to find new sources of money, the paper said.