Global Financial Safety Net:
FLAR’s role in responding to the Covid-19 crisis
DOI:
https://doi.org/10.23925/1806-9029.37i1(67)71951Keywords:
FLAR, regional monetary arrangements, COVID-19 pandemic, global financial safety netAbstract
This article aims to understand the role of the Latin American Reserve Fund (FLAR) during the COVID-19 Pandemic. It is a regional liquidity fund whose main function is to help participating countries face crises in their balance of payments. The hypothesis is that FLAR was used to meet credit needs within a strategy that involves other entities of the Global Financial Security Network (RGSF), in times of greatest turbulence and capital flight, reducing the effects of the shocks caused by the Pandemic. We conclude that the FLAR did not play a relevant role. Among the reasons, we have the limited volume of resources available and the reaction of the IMF, the main participant in the RGSF which, by making changes to adapt it to the crisis, gained the preference of the countries that are part of the FLAR, which eclipsed its operation during the Pandemic.
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