The IMF said it expected to provide up to US$17 billion to these countries through 2014, including up to US$8 billion over the next two years. In addition, the fund said low-income countries would not have to pay interest on any outstanding IMF loans through 2011.

The resources to increase lending will come in part from the sale of IMF gold, the fund said.

"This is an unprecedented scaling up of IMF support for the poorest countries, in sub-Saharan Africa and all over the world," said Dominique Strauss-Kahn, the head of the IMF.

He said the G-20 countries at their April meeting asked the IMF to respond to the global financial crisis, which has hit low income countries so hard "and we are responding with a historic set of actions in terms of support for the world's poor."

The US$8 billion over the next two years exceeds the G-20 call for US$6 billion in new lending to low income countries.

Strauss-Kahn said the new resources the fund was providing and new means of delivering them "should help millions of people from falling into poverty."

tailored instruments

The IMF said it was establishing a new set of financial instruments tailored to the diverse needs of low income countries and better suited to meet the crisis challenges. The instruments address medium and short term needs as well as emergency support.

The IMF said the global financial crisis originated in the advanced economies and then spread to emerging market countries in Latin America, Asia and the Middle East.

"But a third wave of the crisis has threatened the remarkable economic progress many (low income countries) have made over the past decade," the IMF said. The World Bank, the IMF's sister organisation, has expressed similar concerns.

The impact of the financial crisis on these countries, the IMF said, coupled with the sharp rise of food and fuel prices in 2007, has created much higher financing needs that the international community would have to meet.

The fund said lending to low income countries has increased over the past year to four times historical levels.

For example, in sub-Saharan Africa new IMF lending commitments from January to mid July 2009 reached US$2.7 billion compared with US$1.1 billion for all of 2008.

- AP