US has no plans to lend money to IMF

2011-12-03 13:33

Washington - The US has no plans to lend money directly to the International Monetary Fund, a senior Treasury official said on Friday, as the fund pitches to boost its resources in the case of financial emergency.

The official, who would not be identified, said the US believes the IMF has enough resources for its needs.

Currently the IMF has $389bn available to lend to its member countries.

IMF managing director Christine Lagarde has said it needs to boost its resources to be able to cope with potential large-scale financial meltdown - with all eyes in recent months on Europe.

On Friday, IMF spokesperson Gerry Rice said the Fund "will need more resources should the crisis deepen further," suggesting one source could be bilateral loans from central banks, including the European Central Bank.

"The European authorities - like some other IMF member countries - are exploring bilateral loans to the IMF," Rice said.

"As we have also noted, such loans could indeed come from member country central banks," some of which are already lending to the Fund, he added.

Bilateral loans to the IMF could be turned around and lent on to countries in need, under the Fund's strict conditions for fiscal probity.

Analysts see that Spain and Italy, their finances deeply out of balance and markets pushing up their costs to borrow, could be in line for rescue packages from the IMF.

But the fund's board, which is already suspicious of committing any more money to the crisis-wracked eurozone, would have to sign off on how any funds are used, including those from bilateral loans.

- AFP