IMF finalising $100-bn loan from Japan: Report
IMF is finalising a USD 100-billion loan from Japan and is considering issuing bonds to double financial resources.
By PTI |
NEW YORK: The International Monetary Fund is finalising a USD 100-billion loan from Japan and is considering issuing bonds for the first time in its history, as part of an effort to double the financial resources it has to fight the deepening global recession.
The IMF isn't in danger of running out of money, the Wall Street Journal quoted Deputy Managing Director John Lipsky as saying, though the fund has made commitments to lend about USD 50 billion in recent months to Pakistan, Iceland and a clutch of Eastern European countries, and is talking to others.
But the organisation has wanted for months to double its lending ability to about USD 500 billion from USD 250 billion, to bolster confidence that it could handle other borrowers amid the crisis, the paper said.
Asked whether the Western European countries, outside tiny Iceland, might turn to the IMF for loans if the crisis worsens, Lipsky said, "in the current circumstances, the right approach is 'never say never.'" The IMF's executive board is expected to discuss potential sources of funding next month.
The plan of a USD 100-billion loan from Japan is moving forward even as Japan announced on Thursday that it has been in a recession for more than a year, the Journal said.
But Japan still has one of the world's largest foreign-currency reserves and because plunging global demand for its exports is Japan's biggest single economic problem, shoring up the rest of the world's spending ability could help Japan's recovery too, it added.
In the past, the US and Europe have blocked attempts by the IMF to issue bonds, figuring that it would make the IMF too independent of their direction, former IMF chief economist Michael Mussa was quoted as saying.
The IMF now depends on loans from its member nations for financing, unlike the World Bank.
The IMF isn't in danger of running out of money, the Wall Street Journal quoted Deputy Managing Director John Lipsky as saying, though the fund has made commitments to lend about USD 50 billion in recent months to Pakistan, Iceland and a clutch of Eastern European countries, and is talking to others.
But the organisation has wanted for months to double its lending ability to about USD 500 billion from USD 250 billion, to bolster confidence that it could handle other borrowers amid the crisis, the paper said.
Asked whether the Western European countries, outside tiny Iceland, might turn to the IMF for loans if the crisis worsens, Lipsky said, "in the current circumstances, the right approach is 'never say never.'" The IMF's executive board is expected to discuss potential sources of funding next month.
The plan of a USD 100-billion loan from Japan is moving forward even as Japan announced on Thursday that it has been in a recession for more than a year, the Journal said.
But Japan still has one of the world's largest foreign-currency reserves and because plunging global demand for its exports is Japan's biggest single economic problem, shoring up the rest of the world's spending ability could help Japan's recovery too, it added.
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In the past, the US and Europe have blocked attempts by the IMF to issue bonds, figuring that it would make the IMF too independent of their direction, former IMF chief economist Michael Mussa was quoted as saying.
The IMF now depends on loans from its member nations for financing, unlike the World Bank.
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