IMF considers aid for Poland to prevent crisis

[Joanne98]

KUALA LUMPUR, Feb 7 (Reuters) - The International Monetary Fund is holding talks with Poland, central Europe's largest economy, on a possible loan to fend off contagion from the global financial crisis that forced the Fund to intervene in Hungary.

Ex-communist Poland and Hungary joined the European Union in 2004 and although the larger country has sounder finances than Hungary, which has run huge budget and current account deficits for years, it has been hit by financial contagion.

"The Poles are saying that they are okay today and I think they are right," IMF Managing Director Dominique Strauss-Kahn said on Saturday after he attended a central bankers meeting in Kuala Lumpur.

"They also say its not impossible that in the future they may be under pressure, so we are discussing with them to see if they need or don't need more global (agreement) with the Fund," Strauss-Kahn said.

According to research from investment bank UBS, Poland is the sixth most vulnerable of its universe of emerging market economies based on its short term financing requirements as a percentage of gross domestic product versus its reserves.

http://www.reuters.com/article/marketsNews/idUSKLR39644720090207