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India and the IMF

India and the IMF. January 22, 2010. At a Glance : India's Relations with the IMF. Current IMF membership: 186 countries India Joined on December 27, 1945; Article VIII Quota : SDR 4,158.20 million Outstanding loans: None

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India and the IMF

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  1. India and the IMF January 22, 2010

  2. At a Glance : India's Relations with the IMF • Current IMF membership: 186 countries • India Joined on December 27, 1945; Article VIII • Quota: SDR 4,158.20 million • Outstanding loans: None • The last Article IV Executive Board Consultation was on February 6, 2009

  3. ASSISTANCE AFTER NATURAL DISASTERS • IMF Chief Calls for ‘Marshall Plan’ for Shattered Haiti • IMF head calls for major international aid plan to rebuild Haiti • IMF has promised initial $100 million as emergency funding • Urges donors to grant additional debt relief • The head of the IMF has called for a major multilateral aid plan to rebuild the shattered Caribbean island of Haiti where the fight is still on to save lives after a devastating earthquake. • “My belief is that Haiti— which has been incredibly hit by different things—the food and fuel prices crisis, then the hurricane, then the earthquake—needs something that is big. Not only a piecemeal approach, but something which is much bigger to deal with the reconstruction of the country: some kind of a Marshall Plan that we need now to implement for Haiti,” said Dominique Strauss-Kahn in an interview in Hong Kong. • Haitian officials say the quake has killed up to 200,000 people, injured some 250,000, and made 1.5 million homeless.

  4. Crisis Lending and the IMF The IMF’s Emergency Financing Procedures The Fund has emergency procedures in place to help provide financing at short notice. The Emergency Financing Mechanism was used in 1997 during the Asian crisis for the Philippines, Thailand, Indonesia, and Korea; in 2001 for Turkey; and in 2008-09 for Armenia, Georgia, Hungary, Iceland, Latvia, Pakistan, and Ukraine. When can it be used? When a member country faces an exceptional situation that threatens its financial stability and a rapid response is needed to contain the damage to the country or the international monetary system. How does it work? (i) The Executive Board is informed about the intention to activate the procedures; (ii) a mission is quickly deployed to the country; (iii) as soon as understandings are reached with the government, the Board considers the request to support a program within 48-72 hours. The IMF’s capacity to lend was previously about $250 billion but is now set to increase to $750 billion (as pledged by the Group of Twenty and endorsed by the International Monetary and Financial Committee).

  5. IMF __ contd The SDR is an international reserve asset, created by the IMF in 1969 to supplement the existing official reserves of member countries. SDRs are allocated to member countries in proportion to their IMF quotas. The SDR also serves as the unit of account of the IMF and some other international organizations. Its value is based on a basket of key international currencies. The Exchange rates in terms of SDRs are also available online. 1 USD = 0.640642 SDR SDR Interest Rate = 0.22%

  6. IMF Lending

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