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IMF ready to help vulnerable emerging economies

The International Monetary Fund stands ready to do all it can to help emerging economies vulnerable to the effects of the global financial crisis, the Financial Times reported its chief as saying.

Many emerging economies may be facing balance of payments problems, particularly those in Eastern Europe that funded large deficits with foreign portfolio inflows and bank credit lines, Dominique Strauss-Kahn said in an interview with the paper.

Strauss-Kahn said the IMF is in discussion with many such countries and is ready to work with Asian countries seeking to club together to shield themselves from the crisis. The organization is also looking to create new financing lines with fewer conditions attached than usual IMF loans.

“Conditionality is part of our business - since money without policies is a waste,” Strauss-Kahn told the paper.

“But these policies have to address the problem at stake and not other issues. We are not trying to fix the world. We are trying to fix the problem.”

The IMF chief welcomed the bank rescue plans announced by US and European governments, calling them "enough" to prevent the crisis from deepening, but added it was crucial to get the details of the plans right for them to be effective. (Reuters)