NZ raises IMF commitment to $NZ4.1 billion
Tue, 19 Jun 2012 10:48a.m.
New Zealand is committing to lend the International Monetary Fund another $1.26 billion in the event of global economic turmoil, ahead of announcements expected from the G20 meeting in Mexico on measures to counter the ongoing eurozone debt crisis.
The latest $US1b ($NZ1.26 billion) commitment is the second such additional commitment in two years, and brings New Zealand's total potential lending to the IMF to $NZ4.1b, although the global lending agency has so far only drawn down $NZ320 million from New Zealand.
The funds are a loan to the international community, are repayable with interest and may never be drawn on fully.
But the request for a further commitment underlines the ongoing fragility of global economic conditions because of the political and economic crisis in the 21 countries of the eurozone.
Despite Greek elections producing an apparently pro-euro result on Sunday night, interest rates continue to soar on the debt of other, much larger European economies, particularly in Spain.
Mounting fears of the need for a full "sovereign rescue" for the Spanish economy sent the country's interest rates to a euro-era high of 7.28 per cent overnight.
Interest rates above 6 per cent are considered unsustainably high.
While New Zealand's IMF commitment is not earmarked for any particular part of the world, Finance Minister Bill English referred to Europe in his statement announcing the additional commitment.
"It's our expectation that Europe will continue to find solutions to its problems, but the IMF has a role in underpinning global certainty," he said.
A number of G20 countries had made additional IMF commitments in April, and more are expected at the meeting of the world's 20 largest economies in Los Cabos, Mexico, this week.
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19/06/2012 12:50:15 p.m.
The NZ government already borrows from China $1.3m per month and then transfers that to the IMF..
NZ is over shopping and does that with foreign aid money as well.
NZ is out of this league now and it needs to ask for IMF Funding. They already pay UN and OECD to be members so as to attend the most expensive cocktail parties in the world..
NZ is BROKE!!!!@@@@
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