Thursday, July 30, 2009

IMF to increase lending, $14 billion through 2014

The International Monetary Fund says it will begin to increase lending to poor nations. The fund says that the world has higher financing needs due to the global recession, and the sharp rises in food and fuel prices that preceded the recession.

From this Associated Press story that we found at the Lexington Herald Leader, writer Harry Dunphy gives us more of the IMF's statement.

The IMF said it expected to provide up to $17 billion to these countries through 2014, including up to $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 $8 billion over the next two years exceeds the G-20 call for $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."

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