Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education

Front Page



UK Politics







Talking Point
On Air
Low Graphics

Sunday, September 13, 1998 Published at 16:26 GMT 17:26 UK

Business: The Economy

IMF cash crisis

The IMF's coffers are in urgent need of a cash injection

The International Monetary Fund has been left strapped for cash after lending record amounts to countries facing economic and financial turmoil.

Presenting the organisation's annual report, Deputy Director Stanley Fischer said reserves have sunk to historically low levels.

Only $5bn-$9bn are left in its regular reserve fund.

The last year saw member countries borrow $26bn - almost four times the amount lent in the previous year.

Mr Fischer said the organisation would consider using some of the money left for future loans but only if it knew that more resources would be available soon from the United States and other members.

[ image: Stanley Fischer:
Stanley Fischer: "A functioning IMF essential"
"Demands on our resources are not declining...everyone knows the fund's role in Latin America is at issue," he said.

There are fears that Latin American markets could be on the brink of financial turmoil like that seen in Asia and Russia.

But Mr Fischer said no Latin American nation had, so far, requested IMF funds.

He said the IMF's commitments and possible future financial emergencies in other countries made it even more urgent for the US Congress to approve additional funding as quickly as possible.

"The international financial system needs a functioning IMF," he added.

US debates extra funds

President Clinton's administration has requested an extra $18bn for the IMF - $14.5bn as an increase in the US contribution and $3.5bn to boost the emergency fund.

Last week the US Senate approved the request in full, but a House panel would only authorise the money for the emergency fund.

The administration hopes negotiations between the House and Senate will lead to the full amount being approved.

Increases in the IMF's regular reserves and the emergency fund cannot be adopted without the approval of the United States, which is the largest contributor.

Mr Fischer said it was be premature to speculate on what would happen if Congress failed to support the IMF.

He said the IMF's substantial gold reserves could not be used because they assured members of the organisation's financial viability

He also said that the IMF could not borrow funds from international financial markets because it would mark a fundamental change in the way the fund has operated since it was created 53 years ago.

The report was published ahead of the annual meetings of the IMF and the World Bank on September 30.

Mr Fischer said the meetings would focus on strengthening the international financial system based the experiences gained from the Asian and Russian experiences.

Advanced options | Search tips

Back to top | BBC News Home | BBC Homepage | ©

The Economy Contents

Relevant Stories

17 Jul 98 | The Economy
US set to agree IMF bail-out

16 Jul 98 | The Economy
Aid causes IMF cash crisis

17 May 98 | Economy Reports
The IMF and World Bank

Internet Links


The BBC is not responsible for the content of external internet sites.

In this section

Inquiry into energy provider loyalty

Brown considers IMF job

Chinese imports boost US trade gap

No longer Liffe as we know it

The growing threat of internet fraud

House passes US budget

Online share dealing triples

Rate fears as sales soar

Brown's bulging war-chest

Oil reaches nine-year high

UK unemployment falls again

Trade talks deadlocked

US inflation still subdued

Insolvent firms to get breathing space

Bank considered bigger rate rise

UK pay rising 'too fast'

Utilities face tough regulation

CBI's new chief named

US stocks hit highs after rate rise

US Fed raises rates

UK inflation creeps up

Row over the national shopping basket

Military airspace to be cut

TUC warns against following US

World growth accelerates

Union merger put in doubt

Japan's tentative economic recovery

EU fraud costs millions

CBI choice 'could wreck industrial relations'

WTO hails China deal

US business eyes Chinese market

Red tape task force

Websites and widgets

Guru predicts web surge

Malaysia's economy: The Sinatra Principle

Shell secures Iranian oil deal

Irish boom draws the Welsh

China deal to boost economy

US dream scenario continues

Japan's billion dollar spending spree