IMF: After Ukraine, Hungary Next To Receive Bailout Funds

Washington, D.C. (AHN) - Hungary is next in line to receive financial assistance from the International Monetary Fund after the multilateral body extended a $16.5 billion lifeline to Ukraine, according to IMF director Dominique Strauss-Kahn.

The money that IMF offered Hungary is part of a $200 billion fund it has made available for lending to nations that are in distress financially following the global credit crunch. The first recipient was Iceland which received a $2.1 billion loan from the IMF on Friday.

Aside from the IMF, G7 nations also pledged to help stabilize global markers. The group is composed of the U.K., Canada, France, Germany, Italy, Japan and the U.S.

The IMF did not disclose how much it will lend to Hungary, although the fund hinted it should be above $10 billion. Hungary needs the extra funds to address its ballooning budget deficit, deflate the forint which is its overvalued currency, replenish its depleted foreign exchange reserve and pay short-term foreign currency debts.

Another likely candidate for IMF help is Poland after the Warsaw Stock Exchange suffered five straight days of plummeting stock values, while its money, the zloty, declined against the U.S. dollar by 17 percent.

Marek Matraszek, the founding partner and managing director of CEC Government Relations in the Polish capital city, told the International Herald Tribune, "A week ago, people would have told you that this is an oasis of calm and stability... They didn't expect that the lack of confidence in Central Europe would bleed over from Hungary and Ukraine."