Building with cracks from the earthquake in Venezuela [AFP=Yonhap News]

The International Monetary Fund (IMF) and the World Bank (WB), which recently restored relations with Venezuela for the first time in over 20 years, are stepping in to assist the country as it struggles in the wake of a series of powerful earthquakes.

The IMF stated on the 25th (local time) that it is closely monitoring the situation on the ground and will work in close coordination with Venezuelan authorities to support disaster recovery efforts. However, the organization did not disclose specific details regarding the support, as a comprehensive assessment of the damage has not yet been completed.

Previously, Venezuelan interim President Delcy Rodríguez announced plans to allocate $200 million (approximately 308 billion won) for earthquake recovery, utilizing funds from the IMF.

In relation to this, Bloomberg reported that Venezuela is planning to withdraw a portion of the $4.5 billion in Special Drawing Rights (SDRs) held at the IMF.

SDRs are international reserve assets allocated by the IMF to member countries based on their quota shares. Unlike standard bailout loans, which are subject to rigorous conditions and policy implementation requirements, SDRs offer the advantage of being relatively accessible for governments to use when needed.

However, the IMF declined to officially confirm specific details, including the exact funding methods for these resources.

Powerful earthquake in Venezuela [Reuters=Yonhap News]

The World Bank, a leading global financial institution alongside the IMF, also announced that it is in contact with Venezuelan authorities and is reviewing potential support measures.

As a multilateral lender, the World Bank explained that it could provide aid, including technical assistance and coordination with international partners responding to the disaster.

The rapid intervention by these two major international financial organizations to provide disaster relief to Venezuela was made possible by the dramatic restoration of relations that occurred earlier this year.

The IMF had ceased substantive cooperation with Venezuelan authorities in 2004 during the administration of the late President Hugo Chávez. Following years of financial isolation through various regime changes, the two parties finally resumed official exchanges this past April, ending a 22-year hiatus. The World Bank, which had also stopped operations in the country since 2005, similarly reactivated its cooperative framework with Venezuela this April, in line with shifting international perspectives on the regional situation.