WASHINGTON: India is likely to get a standby creditof2.2 billion dollars from the International Monetary Fund and a further 620 million dollars from its compensatory and contingency financing facility (CCFF)
A proposal for 620 million dollars under CCFF is already before the board and it probably be approved in the middle of September.
The larger amount under standby for 2.2 billion dollars will probably come up towards the end of October according to well-informed sources
Under the CCFF the compensatory element provides resources to members to cover export shortfalls or excessive cereal import costs arising from events beyond their control while the contingency factor helps with fund-supported arrangements to maintain the momentum of adjustment when faced with a broad range of unforeseen adverse external shocks in the market.
Standby arrangements typically cover periods of one to three years. They focus on appropriate exchange rate and interest rate policies aimed at overcoming short-term balance of payments difficulties
Performance criteria such as budgetary and credit ceilings appropriate exchange and interest rate policies and avoidance of restrict current payments and transfers are not applied.
Article extracted from this publication >> September 13, 1991
