US legislation to boost IMF efforts to tackle global crisis

Welcoming the decision of the US Congress' approval of a legislation related to the lending agency, the International Monetary Fund (IMF) has said the move will boost its efforts to tackle the global economic crisis.     

The green signal would pave the way for additional funds to the IMF and reforms related to the country representation at the multilateral lending agency, among others.     

"Approval by the US Congress of a package of measures related to the IMF gives a big boost to international funding to combat the global economic crisis and marks a significant step forward in reforming the 185-member inter-governmental institution that has taken a central role in channeling assistance to countries hit by the financial turmoil," IMF said in a statement on Thursday.     

The IMF would get more funding to tackle the global crisis under an expanded borrowing arrangement. The US has committed to increase its credit line by up to $100 billion.     

Further, the approval would help in reforms related country representation at the multilateral lending agency. The reform would include "greater representation for dynamic emerging markets and enhanced voice and participation for low income countries," the statement noted.

The legislation related to the IMF was included by the US Senate in the Supplemental Appropriations Act for fiscal year 2009. The final Act, including the package of measures regarding the multilateral lending agency, was passed by the House on June 16 and the Senate approved the same on June 18.     

According to the statement, the adoption of the legislation by the Congress would provide the US administration with necessary domestic authority to move ahead in several keys areas affecting the IMF.     

"This is a significant step forward that will help the IMF in its efforts to respond to the global financial crisis and also to strengthen the governance and operations of the institution," IMF Managing Director Dominique Strauss-Kahn said.     

Other measures include providing expanded investment authority to the agency, making it less dependent on earning revenue from interest paid on loans.     

In addition, the legislation also urges the use of IMF resources to leverage additional concessional assistance to low-income countries.     

The leaders of G-20 nations after their meeting on April 2 in London, had called for tripling IMF's pre-crisis lending resources to $750 billion.