The IMF precautionary credit line, a new type of loan facility offered to countries to help stave off crises, would be “perfect” for Hungary, whose bailout expires next month, Morgan Stanley said.
The precautionary credit line (PCL), aimed at nations with “moderate vulnerabilities,” was presented last week by the IMF to attract more countries to its contingency financing program. It requires semi-annual reviews by the Washington-based lender, instead of the quarterly reviews for Hungary’s 20 billion euro (US$26 billion) IMF-led bailout, Morgan Stanley said.
Hungary, the first EU member to obtain a bailout in 2008, doesn’t need a new IMF loan because it can finance its budget deficit from the market, Hungarian Economy Minister Gyorgy Matolcsy said on Friday.
Hungary wants to regain its “economic sovereignty” and doesn’t want to negotiate economic policy with the IMF, Hungarian Prime Minister Viktor Orban said after the fund failed to endorse the government’s budget plans in July.
“The PCL represents another line of defense which we think is ready to be used should Hungary request it,” Morgan Stanley said in a note yesterday. “The IMF is clearly keen to step in and contain the situation as it did in 2008-09. We do not doubt that Prime Minister Orban’s rhetoric would turn much softer towards the IMF if the situation became really serious.”
The precautionary credit line targets countries that would not qualify for the existing flexible credit line. The loan would be made available based on the assessment of a country’s external position, the ability to finance itself from the market, fiscal discipline monetary policy and the health of the banking system, Morgan Stanley said.
“When one reads the conditions, the PCL would be perfect for Hungary, a country whose fundamentals are not strong enough to qualify for the flexible credit line but which also implemented impressive policies in recent years, achieving a much better fiscal position,” Morgan Stanley said.
Super Typhoon Kong-rey is the largest cyclone to impact Taiwan in 27 years, the Central Weather Administration (CWA) said today. Kong-rey’s radius of maximum wind (RMW) — the distance between the center of a cyclone and its band of strongest winds — has expanded to 320km, CWA forecaster Chang Chun-yao (張竣堯) said. The last time a typhoon of comparable strength with an RMW larger than 300km made landfall in Taiwan was Typhoon Herb in 1996, he said. Herb made landfall between Keelung and Suao (蘇澳) in Yilan County with an RMW of 350km, Chang said. The weather station in Alishan (阿里山) recorded 1.09m of
NO WORK, CLASS: President William Lai urged people in the eastern, southern and northern parts of the country to be on alert, with Typhoon Kong-rey approaching Typhoon Kong-rey is expected to make landfall on Taiwan’s east coast today, with work and classes canceled nationwide. Packing gusts of nearly 300kph, the storm yesterday intensified into a typhoon and was expected to gain even more strength before hitting Taitung County, the US Navy’s Joint Typhoon Warning Center said. The storm is forecast to cross Taiwan’s south, enter the Taiwan Strait and head toward China, the Central Weather Administration (CWA) said. The CWA labeled the storm a “strong typhoon,” the most powerful on its scale. Up to 1.2m of rainfall was expected in mountainous areas of eastern Taiwan and destructive winds are likely
The Central Weather Administration (CWA) yesterday at 5:30pm issued a sea warning for Typhoon Kong-rey as the storm drew closer to the east coast. As of 8pm yesterday, the storm was 670km southeast of Oluanpi (鵝鑾鼻) and traveling northwest at 12kph to 16kph. It was packing maximum sustained winds of 162kph and gusts of up to 198kph, the CWA said. A land warning might be issued this morning for the storm, which is expected to have the strongest impact on Taiwan from tonight to early Friday morning, the agency said. Orchid Island (Lanyu, 蘭嶼) and Green Island (綠島) canceled classes and work
KONG-REY: A woman was killed in a vehicle hit by a tree, while 205 people were injured as the storm moved across the nation and entered the Taiwan Strait Typhoon Kong-rey slammed into Taiwan yesterday as one of the biggest storms to hit the nation in decades, whipping up 10m waves, triggering floods and claiming at least one life. Kong-rey made landfall in Taitung County’s Chenggong Township (成功) at 1:40pm, the Central Weather Administration (CWA) said. The typhoon — the first in Taiwan’s history to make landfall after mid-October — was moving north-northwest at 21kph when it hit land, CWA data showed. The fast-moving storm was packing maximum sustained winds of 184kph, with gusts of up to 227kph, CWA data showed. It was the same strength as Typhoon Gaemi, which was the most
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