Wednesday October 29, 2008
Gordon Brown, U.K. Prime Minister, on October 28, called on countries with large currency reserves such as China and oil-rich states to donate to the IMF.
The world probably will need more money because problems may spread from liquidity shortages to balance-of-payments gaps to slower economic growth, according to Strauss-Kahn, Managing Director of the IMF.
As Simon Johnson, a former IMF chief economist, said that The fund has the option to tap an additional $35 billion to $50 billion from rich countries. The IMF may need to go beyond that total to meet the demand for loans. He added, "If we are really facing the problem I think we are, you need about $1 trillion".
Demand for the fund's loans -- which had dried up over the past five years as developing nations boomed -- is now soaring. Hungary, Ukraine, Belarus, Iceland and Pakistan have all announced this month that they are seeking financial support from the IMF.
To qualify for the IMF's "Short-Term Liquidity Facility," countries must have been assessed by the IMF "very positively" on their recent economic policies, the fund said in a statement. Asked specifically about Argentina's eligibility, Strauss-Kahn said the country wouldn't qualify for the new program because it doesn't meet that standard.
Related Posts :
- East Europe Borrowers panic as Banks Cut Franc Loans
- Davidson Sees Threat to Dubai Economy From Credit
- Iceland's central bank unexpectedly raised the benchmark interest rate to 18 percent
- Hungary to get $25 bln rescue packages from IMF
- Bloomberg: IMF Starts Short-Term Lending Program to Ease Crisis (Update2), October 29, 2008 17:24 EDT
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