#1
#1 out of 1
business9h ago
How the IMF can help Venezuela stabilize its economy
- The IMF could help Venezuela stabilize its economy through a multilateral debt restructuring backed by new LIOA safeguards.
- US support remains critical, as Washington’s leverage shapes Venezuela’s access to IMF resources and reforms.
- Debt relief will be needed, with estimates suggesting substantial haircuts to restore debt sustainability.
- The IMF’s LIOA policy reform allows lending into official arrears to coordinate with large creditors.
- Chinas role is pivotal; Beijing must decide between constructive participation or sidelined risk if it resists.
- Policy steps include recognizing a transitional government and lifting sanctions to unlock IMF engagement.
- Unfreezing about five billion SDRs could provide immediate liquidity for stabilization needs.
- Early creditor coordination is essential to set realistic recovery expectations and deter holdouts.
- The plan emphasizes strict program conditionality to ensure comparable treatment and curb preferential creditor payments.
- Experts stress that IMF engagement offers credibility to debt sustainability analyses and broader creditor cooperation.
- The article frames the plan as a test for IMF reforms and multilateral discipline in debt restructurings.
Vote 0