KEY International Monetary Fund members will today discuss means of boosting the IMF's financial position ahead of an expected decline in Fund resources, an IMF official said in Washington yesterday.
A committee of 11 major financial powers known as the Group of Ten (G10) will consider doubling its General Agreement to Borrow (GAB) from around $25.5 billion to $51 billion, said one official.
The GAB, under which participating governments make funds available to the IMF in special or emergency situations, currently consists of the Group of Seven
(G7) countries Britain, Canada, France, Germany, Italy, Japan and the United States plus Belgium, the Netherlands, Sweden and Switzerland.
A plan being discussed since last year, which aims at making more resources available for a financial safety net to help the Fund cope with crises like the one that hit Mexico a year ago has focused on the possibility of mobilising additional funding from non G10 countries.
The official stressed that the Fund finances itself principally through quota contributions from member states and has not made use of the G10 borrowing arrangement since the late 1970s.
"It's an agreement to lend, not an automatic credit," he said, adding that the decision to consider an increase was made after an evaluation of the IMF's liquidity position in 1995 following the Mexican peso crisis.
While usable IMF assets in December 1994 were put at around $108 billion, that figure has now fallen to between $60 and $67.5 billion he said.
