IMF is down to its last $10bn

JUST LAST month the IMF approved an $11.2bn (pounds 6.9bn) loan targeted at rouble stability, part of a $22.6bn package. The next tranche is due to be disbursed in September. John Odling-Smee, the British official in charge of Russia at the IMF, arrived in Moscow on Monday, and the IMF's Executive Board is analysing the latest Russian measures, writes Andrew Marshall.

But the IMF has problems of its own. A year that has seen mammoth rescue packages for Thailand, Indonesia, Korea and Russia has severely depleted its resources, and by the end of the year the Fund will have less than $10bn to lend. Its liquidity ratio - the ratio between liquid liabilities and uncommitted usable resources -will have fallen to 29 per cent, an all-time low.

The Fund operates in some ways like any bank: it lends on the basis of reserves which are provided by its shareholders, in this case nation-states. It has been trying for some time to top up its reserves, and the US has proposed adding $18bn to its contribution. This would, in turn, open up the possibility of other states contributing more. But the US Congress is resisting, claiming the IMF's policies encourage moral hazard.