Japan signed an agreement on Friday on terms of its commitment to lend up to US$100 billion to the IMF to provide financial lifelines to crisis-hit emerging countries.
The agreement was signed in Rome on the sidelines of a Group of Seven finance leaders’ meeting largely aimed at addressing global financial turmoil that has led to a sharp economic slowdown.
“This loan is important not only for the IMF but also for all countries in need of help because of the crisis,” IMF managing director Dominique Strauss-Kahn told reporters at the signing in Rome.
“This loan is the biggest loan in the history of mankind,” he said, signing alongside Japanese Finance Minister Shoichi Nakagawa.
“This commitment is the single largest supplemental financing contribution by an IMF member country ever, and it clearly demonstrates Japan’s leadership and continuing commitment to a multilateral approach to global economic and financial challenges,” Strauss-Kahn said.
He said he hoped other countries would join Japan in providing support to the 185-nation institution.
He told reporters after the signing that the fund had enough money at present but in the future he hoped to double its funds as more countries would need its help in the economic crisis.
The IMF has awarded aid to several countries, including Ukraine and Hungary.
“Owing to the bad figures we have on the economic side, I’m expecting a second wave of countries coming and knocking on the door,” he said.
Meanwhile, advanced economies are in a “deep recession” ahead of the crisis talks in Rome, which kicked off with a working dinner on Friday.
“The world economy is close to recession. The advanced countries are in deep recession,” he said.
“We don’t see any signal for the time being showing that 2009 could be better than we expect,” he told reporters earlier, but declined to describe the worldwide economic crisis as a depression.