Exclusive: G20 may boost IMF resources by $400-500 billion: officials
By Jan Strupczewski
BRUSSELS (Reuters) - The world's 20 biggest economies are likely to agree to increase the resources of the International Monetary Fund by between $400 and $500 billion, rather than the $600 billion initially sought by the IMF, Group of 20 officials have told Reuters.
The extra money is to give the IMF, which is a lender of last resort to governments, more firepower to fight the sovereign debt crisis, triggered by unsustainable policies in euro zone countries such as Greece, Portugal and Ireland.
G20 finance ministers meet next week in Washington to discuss the IMF's call for more resources from January after the euro zone increased the size of its own crisis-fighting funds in March in response to G20 pressure.
IMF Managing Director Christine Lagarde said on Thursday that reaching an agreement could take some time, a sign that next week's meeting may not be the last word.
But she also said the IMF may not need as much money as it thought just a few months ago as economic and financial risks had receded and the global lender's funding needs were now smaller.
Officials said that with the first quarter peak of euro zone government refinancing needs already taken care of by the European Central Bank's cheap long-term loans, or refinancing operations, the need for more IMF resources has diminished.
"I would say it will be somewhere between $400 and $500 billion and it very much depends on how much the big global economies and European, but non-euro zone economies pledge," one G20 official said.
In January, the IMF estimated it would need an additional $500 billion to lend and another $100 billion for reserves to erect an adequate safeguard against the risks posed by the euro zone's crisis. Continued...