Washington - The International Monetary Fund on Wednesday approved a new programme to provide emergency loans to countries facing serious cash shortages in the wake of an ongoing financial crisis. 

Countries with a "track record" of solid economic policies can now apply for three-month loans without the usual conditions attached, IMF Managing Director Dominique Strauss-Kahn said. 

Typical IMF loans are linked to often-strict policy requirements, such as privatizing industries or reducing subsidies. Countries with shaky economic pasts, such as Argentina, would not be eligible for the new loans, Strauss-Kahn said. 

He said that "some" countries had already expressed interest in the so-called Short-Term Lending Facility, which was approved by the IMF's 24-member Executive Board. 

Separately, the US Federal Reserve on Wednesday agreed to trade up 30 billion dollars each to the central banks of South Korea, Singapore, Brazil and Mexico in an effort to stop the financial crisis from spreading to the developing world. 

The creation of the new currency swap lines, which will remain open until April 30, were designed to "mitigate the spread of difficulties in obtaining US dollar funding in fundamentally sound and well managed economies," the Fed said in a statement. 

Strauss-Kahn welcomed the arrangements. 

The Fed already operates similar currency swaps with 10 other central banks, including arrangements with New Zealand and Australia set up since September. It has also removed limits on existing swap lines with four central banks, including the European Central Bank. 

The IMF has faced pressure to step up its efforts to help struggling countries battling a credit crisis that has moved well beyond developed economies. 

World Bank President Robert Zoellick earlier this month said that about 30 countries could be facing balance of payment problems. 

To date, the IMF has been operating on an ad-hoc basis, providing emergency loans to Iceland, Ukraine and Hungary, where governments have all faced serious cash shortfalls. The new programme fills a "gap in the fund's tool kit of financial support," Strauss-Kahn said. 

About 200 billion dollars are available in total, and countries can borrow up to five times what they put into the 185-country institution. Strauss-Kahn would not say how much he expected the fund to pay out, but the board will meet for a review if the programme tops 100 billion dollars. 

Strauss-Kahn acknowledged that the IMF could need a cash infusion of its own, to help the Washington-based crisis lender dole out aid amid the financial turmoil. British Prime Minister Gordon Brown called this week on emerging economies like China to meet the shortfall. (dpa)