IMF welcomes G-20 action to support global growth

The International Monetary Fund welcomed the commitment made by the G-20 Summit on Thursday to enhance the multilateral agency's ability to support emerging markets and low-income countries, and to bring the world economy out of its deepest post-war recession.

Observing that the global crisis is hitting emerging markets and poor countries hard, IMF Managing Director Dominique Strauss-Kahn said, "The G-20 leaders have today (Thursday) sent a powerful signal that the international community is committed to support these countries, including by ensuring that the IMF has the resources available."

At the end of their London Summit on April 2, G-20 countries agreed to make available immediately an additional USD 250 billion, to be expanded by up to $500 billion in total.

The G-20 leaders also called for a doubling of the IMF's lending capacity to its low-income members, and for a boost to global liquidity through a $250 billion issue of the Special Drawing Rights (SDR) reserve asset. To enhance the voice of emerging markets and developing countries in the IMF, the G-20 urged accelerated review of IMF's quotas.

Strauss-Kahn welcomed the backing given to the IMF¿s new Flexible Credit line (FCL), a precautionary credit line launched by it last month to buttress strong economies against fallout from the global crisis.

"I am very pleased by the support demonstrated by the G-20 leaders to the FCL. Mexico has decided to seek an FCL arrangement and I am looking forward to rapid take-up of this new facility by other countries," he said.

Welcoming the G-20's decision to double IMF's concessional lending capacity for low income countries, he said that it will be brought forward by the Spring Meetings proposals to achieve this.

"The IMF has a unique capacity to analyse the relationships between financial markets and the real economy, with a global perspective given its membership. Our global and country monitoring procedures are being sharpened, including with a new mechanism for early warnings," Strauss-Kahn said.

"It is also key that the G-20 has confirmed the acceleration of quota reform to early 2011. This demonstrates a renewed commitment to the importance of governance and legitimacy in the global architecture," he said.