IMF to replenish coffers

Click to follow
The International Monetary Fund, the world's economic policeman, is preparing to give newly industrialised countries a greater say in its decisions in return for an infusion of money, writes Diane Coyle.

The IMF's available funds have been depleted by record lending of $26bn (pounds 16.7bn) in the latest financial year, including its biggest loan, a $10bn sum extended to Russia. At the fund's annual meeting in Washington later this month its steering committee will consider plans to double the amount raised from its membership through their "quotas".

The IMF is already putting the finishing touches to an increase in the amount it can borrow from members through the so-called "new arrangement to borrow" (NAB). This follows the fund's offer of $17bn in stand-by credit to the $50bn international rescue package for Mexico in 1995.

The NAB will tap the rising economies such as Korea and Singapore, as well as countries such as Austria and Australia, for the first time. Along with the existing "general arrangement to borrow", it will make up to $50bn in emergency loans available to the IMF.

The fund's move will come hard on the heels of the recent admission of nine new members to the Bank for International Settlements, the Basle- based central bankers' bank. The expansion of the BIS - which includes Brazil, China, Hong Kong, India, Korea, Mexico, Russia, Saudi Arabia and Singapore - was also intended to reflect the changing global economic order.