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IMF and World Bank move to forestall oil-led defaults

FT [1]
January 28, 2016

Officials from the International Monetary Fund and the World Bank are heading to Azerbaijan to discuss a possible $4bn emergency loan package in what risks becoming the first of a series of bailouts stemming from the tumbling oil price [2].

The Baku visit, which follows a currency crisis triggered by the collapse in crude, comes amid concern at the two global institutions over emerging market producers from central Asia to Latin America.

The fund and the bank have also been monitoring developments in other oil-producing countries such as Brazil, which is now mired in its worst recession in more than a century [3], and Ecuador. The oil-driven crisis in Venezuela [4] has even raised the possibility of repaired relations between the fund and Caracas, a city IMF staff last visited more than a decade ago.

Azerbaijan depends on oil and gas [5] for 95 per cent of its exports and the fallout of its currency weakness has sparked a series of protests across the country rattling the government of President Ilham Aliyev.

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