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IMF Boosts Lending to Poor Countries

The International Monetary Fund has announced "unprecedented measures" to boost lending to low-income countries.

The IMF said Wednesday the measures could increase concessional lending up to $17 billion.

"This set of reforms, which are aimed at improving our engagement and effectiveness in low income countries, are truly unprecedented in the history of the fund," says Reza Moghadam, IMF director of strategy, policy and review.

Over and above G20 mandate

The reforms "go well beyond the mandate" of the G20 summit, he says, which last April pledged large sums for loans to poor nations. The summit was called in response to the global economic crisis.

"We've been engaged in a series of reforms since the onset of the crisis to both respond to the crisis and build a more effective IMF beyond the crisis," he says.

Funding for the enhanced lending measures may come in part from the sale of IMF gold reserves.

"The package of reforms contains the availability of concessional financing of about $17 billion over the next six years," he says.

Putting it in perspective

"The average concessional lending in the fund for the last three years has been about $1 billion dollars per year…. So far this year, we have lent or committed about $3 billion. So more than the last three years put together has been committed just in the first six months of this year," he says.

He expects about $8 billion will be spent by the end of next year alone.