Report: World Bank to cut interest rates

from Earth Times

The World Bank is to make major cuts in the rates it charges big developing states under a deal to boost aid for poor nations, a published report said Tuesday.

As part of a deal, the poverty-fighting bank will contribute as much as $3.5 billion to the International Development Association, a bank unit that provides grants and no-interest loans to the world's 80 poorest nations, The Wall Street Journal reported.

The bank contribution is meant to encourage rich countries to boost their commitments too, to between $25 billion and $30 billion for the three years ending June 30, 2011, the Journal said.

Those countries have currently committed about $18 billion for the three years ending next June 30.

The deal, negotiated over the past few months, "was pushed hard by the World Bank's new president, Robert Zoellick, who has emerged as a pragmatic horse trader, unsympathetic to conservative critics who say the bank should cut off lending to countries that can borrow easily on private markets," the Journal said.

The bank is pushing for a final deal in time for its annual meeting Oct. 19 in Washington.