NZ agrees to lend IMF up to $1.4 billion
New Zealand has agreed to lend the International Monetary Fund (IMF) more than US$1 billion (NZ$1.4 billion) if the world faces another economic crisis, Finance Minister Bill English says.He said today the commitment was part of the US$550 billion (NZ$762
New Zealand has agreed to lend the International Monetary Fund (IMF) more than US$1 billion (NZ$1.4 billion) if the world faces another economic crisis, Finance Minister Bill English says.
He said today the commitment was part of the US$550 billion (NZ$762.5b) expansion of the IMF's financial resources to make it better able to support the international financial system during times of significant crisis.
New Zealand's commitment is an amount up to US$1 billion -- US$1.34b in New Zealand dollars.
It will be called on only if needed and only if the IMF has exhausted all other options.
"This is a clear way of showing that New Zealand is doing its part as a member of the international community," Mr English said.
"We are doing this to support and protect the global economy that New Zealand depends on to survive."
Mr English described it as part of a backstop arrangement.
"We don't have to provide the funds now, but this commitment does create a contingent liability for the Crown, which will appear on the Government's books later this year," he said.
New Zealand is one of about 40 countries contributing to the IMF in this way.
The contribution is in line with the size of the economy and is similar to New Zealand's other contingent liabilities to the IMF, which total US$1.4 billion.
Included in those liabilities is US$265 million lent to the IMF as part of a range of measures to help it support countries facing balance of payments problems caused by the global economic crisis.
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