IMF gave credit

Written by admin on September 4th, 2009

Capital International Monetary Fund (IMF) will increase significantly due to the allocation of EU countries additional funding and purchase of bonds by China Fund

of European finance ministers agreed to increase from EUR75 billion to EUR125 billion contribution to the EU's anti-crisis fund the IMF. Contribution of Germany, which will allocate funds from its foreign currency reserves through the Bundesbank, will be increased almost twice - from EUR15, 2 billion ($ 20 billion), up to EUR25, 03 billion ($ 35.7 billion). France will provide the IMF EUR18, 45 billion ($ 26.3 billion). Britain expressed its willingness to increase its contribution by $ 11 billion (with $ 15 billion to $ 26 billion).

Some observers explain the decision of the leading European countries to increase contributions to fund the IMF's anti-crisis because of their previous contributions from the European Union did not meet their formal quotas. The first deputy director of IMF John Lipsky said in an interview with Radio Bloomberg, that the ongoing obligations of the European Union in the IMF substantially below the voting quota in the fund. If the EU wanted to participate, respectively, available quotas, this would imply the need to increase their commitments, - said Lipsky.

There is no data about the deteriorating situation in the world economy, on the contrary, it is getting better. Accordingly, the need to increase the IMF's resources, I do not see. Especially in light of budget deficits of most EU countries, due to the costs of promoting the national economy, -- said Fortis Bank economist Nick Kunis.

At the same time, according to strategist Julius Baer Christian Gattikera, the unexpected generosity of the leading EU countries could be explained by the desire to support the countries of Central and Eastern Europe, the strengthening of the crisis which could affect the economies of Western Europe. In the European Union took advantage of the IMF, Hungary, Latvia and Romania.

IMF plans to increase its capital and by issuing bonds. For the first time on 1 July this year the IMF approved a plan to place their bonds among Governments in the amount of $ 150 billion bonds IMF, in all likelihood will not be traded in the open market, and will be exchanged between the governments and central banks of various countries. On Wednesday this week the IMF said the IMF Managing Director Dominique Strauss-Kahn and Deputy Governor of the People's Bank of China Yi signed an agreement that the Chinese central bank will invest in the notes of the IMF up to SDR32 billion, or about $ 50 billion

This is a safe investment for China. In addition, it increases the possibility of the IMF in the aid to needy countries, - commented on the purchase of bonds by China IMF, Mr. Strauss-Kahn. This agreement to acquire a bond is the first in the history of the Fund. China was a reliable tool for investment and fund - the opportunity to extend assistance to its members, particularly emerging markets and countries, - the IMF said.

Brazil and Russia are interested in diversifying their investments in foreign exchange reserves are going to buy bonds on the IMF's $ 10 billion IMF's Ability to purchase bonds are also looking at Japan and India.

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