The head of the International Monetary Fund, Dominique Strauss-Kahn, welcomed an offer by Japan to contribute up to 100 billion dollars to the institution's coffers.
He said the move would help to increase confidence in the IMF's ability to provide emergency loans, particularly to emerging countries, as the global financial crisis bites.
Japanese Prime Minister Taro Aso announced the offer in Tokyo ahead of a financial crisis summit of major industrialized and emerging nations in Washington which began Friday.
"I welcome Prime Minister Aso's announcement that Japan is prepared to lend up to 100 billion dollars to the International Monetary Fund," Strauss-Kahn said in a statement.
"This is a major contribution to maintaining the stability of financial and capital markets, and clearly demonstrates Japan's leadership and strong commitment to multilateralism."
At almost 980 billion dollars, Japan has the second largest foreign exchange reserves in the world after China, as a result of years of market intervention to keep the yen down against the dollar and help exporters stay competitive.
"Japan's action during this period of unprecedented stress for the global financial system will serve to increase confidence that the IMF's resources will be sufficient to meet the financing needs of its 185 member countries -- particularly our emerging market members -- should they need to turn to the Fund for support," Strauss-Kahn said.
Some analysts have suggested the IMF would have insufficient resources to rescue large partners in the emerging world, such as Poland or Turkey, if they required help. It has already announced loans for Hungary and Ukraine.
The IMF is a lender of last resort to countries that need cash.
source
afp.com
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