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The International Monetary Fund (IMF) is proposing a $1 trillion (R8 trillion) expansion of its lending resources to insulate the global economy against any worsening of Europe’s debt crisis, according to an official at a Group of 20 (G20) nation.
The Washington-based lender is pushing China, Brazil, Russia, India, Japan and oil-exporting nations to be the top contributors, according to the official, who spoke on condition of anonymity because the talks are private.
He said that the fund wanted the agreement struck at the February 25-26 meeting of G20 finance ministers and central bankers in Mexico City.
IMF managing director Christine Lagarde said yesterday that her staff were studying options to increase the war chest beyond the current $385 billion. While euro zone nations have already pledged to contribute e150bn (R1.54 trillion), the US has said it had no plans to make new bilateral loans and G20 leaders ended last year at odds over the issue.
Lagarde said: “The biggest challenge is to respond to the crisis in an adequate manner and many executive directors stressed the necessity and urgency of collective efforts to contain the debt crisis in the euro area and protect economies around the world.”
The push by the IMF for more money may extend this month’s rally in investor sentiment towards European bond markets on speculation that the region is enjoying a respite from its two-year debt turmoil and that any euro zone recession may be shallow.
The euro extended its recent gains against the dollar yesterday and European stocks rose.
The euro climbed 0.8 percent to $1.2832 as of 10.38am in London. The Stoxx Europe 600 index erased losses to trade 0.1 percent higher.
A fillip for the IMF is likely to be discussed by G20 deputy finance chiefs at a scheduled meeting in Mexico this week.
At a November summit in the French resort of Cannes, G20 leaders balked at writing fresh cheques for the IMF, demanding that Europe’s governments do more to fix their crisis while saying they would ensure the IMF “continues to have resources to play its systemic role”.
A US official reiterated that stance last month, saying that US President Barack Obama’s administration would not stump up more cash for the IMF and that a solution to the turmoil must be led by Europe.
Russia would not decide on any contribution before March presidential elections, First Deputy Prime Minister Igor Shuvalov said yesterday.
Options for bolstering the IMF’s resources include opening a trust fund or not rolling back a 2009 increase. Officials have also discussed increasing the amount of its Special Drawing Rights.
The Washington-based lender is pushing China, Brazil, Russia, India, Japan and oil-exporting nations to be the top contributors, according to the official, who spoke on condition of anonymity because the talks are private.
He said that the fund wanted the agreement struck at the February 25-26 meeting of G20 finance ministers and central bankers in Mexico City.
IMF managing director Christine Lagarde said yesterday that her staff were studying options to increase the war chest beyond the current $385 billion. While euro zone nations have already pledged to contribute e150bn (R1.54 trillion), the US has said it had no plans to make new bilateral loans and G20 leaders ended last year at odds over the issue.
Lagarde said: “The biggest challenge is to respond to the crisis in an adequate manner and many executive directors stressed the necessity and urgency of collective efforts to contain the debt crisis in the euro area and protect economies around the world.”
The push by the IMF for more money may extend this month’s rally in investor sentiment towards European bond markets on speculation that the region is enjoying a respite from its two-year debt turmoil and that any euro zone recession may be shallow.
The euro extended its recent gains against the dollar yesterday and European stocks rose.
The euro climbed 0.8 percent to $1.2832 as of 10.38am in London. The Stoxx Europe 600 index erased losses to trade 0.1 percent higher.
A fillip for the IMF is likely to be discussed by G20 deputy finance chiefs at a scheduled meeting in Mexico this week.
At a November summit in the French resort of Cannes, G20 leaders balked at writing fresh cheques for the IMF, demanding that Europe’s governments do more to fix their crisis while saying they would ensure the IMF “continues to have resources to play its systemic role”.
A US official reiterated that stance last month, saying that US President Barack Obama’s administration would not stump up more cash for the IMF and that a solution to the turmoil must be led by Europe.
Russia would not decide on any contribution before March presidential elections, First Deputy Prime Minister Igor Shuvalov said yesterday.
Options for bolstering the IMF’s resources include opening a trust fund or not rolling back a 2009 increase. Officials have also discussed increasing the amount of its Special Drawing Rights.
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