IMF, World Bank weigh disaster aid for Venezuela after earthquakes

The International Monetary Fund said it is closely monitoring the situation in Venezuela following a series of powerful earthquakes and will work closely with Venezuelan authorities to support disaster recovery efforts.

IMF spokesperson Julie Kozack told a regular briefing Wednesday (local time) that the fund had been in close contact with Venezuelan authorities and would maintain that cooperation as officials assess the economic impact of the earthquakes and the country's recovery needs.

However, she declined to provide specifics on the form or scale of any assistance, saying a full damage assessment had yet to be completed.

Earlier, Venezuelan acting President Delcy Rodriguez said the government would allocate $200 million from IMF resources to fund the earthquake recovery budget.

Bloomberg reported that Venezuela is considering withdrawing a portion of its $4.5 billion in Special Drawing Rights held at the IMF.

SDRs are international reserve assets that the IMF allocates to member countries based on their quota shares. Unlike conventional bailout programs, which carry strict conditions and policy obligations, governments can draw on SDRs relatively freely when needed.

The IMF, however, declined to officially confirm details on how the funding would be sourced.

The World Bank, another major international financial institution, also said it is in contact with Venezuelan authorities and reviewing options for assistance.

The multilateral lender said it could provide aid including coordination with international partners responding to the disaster and technical support.

The swift engagement by both institutions reflects a diplomatic thaw that took shape earlier this year.

The IMF had suspended substantive cooperation with Venezuelan authorities in 2004, during the presidency of Hugo Chavez, and the country remained financially isolated through subsequent changes of government until April, when the fund formally resumed engagement for the first time in roughly 22 years. The World Bank, which had halted dealings with Venezuela since 2005, also restarted cooperation in April, in line with the international community's reassessment of the political situation in the country.