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IMF head shares the good news

THE head of the International Monetary Fund said in an interview published yesterday that some of the US$1.1 trillion in funds pledged by the Group of 20 leaders could be available within weeks.

Dominique Strauss-Kahn, in an interview with France's Le Figaro, also welcomed greater United States support for the IMF and predicted that US housing prices would bottom out soon.

The US and other leaders of major world economies agreed last week to make US$1.1 trillion available to the IMF and other multi-country development banks like the World Bank to help governments in crisis.

Asked how soon the funds could be available, Strauss-Kahn was quoted as saying, "It's a question of weeks, or months, but not more." He did not say whether that meant the money would be available to the IMF or to governments in need.

The IMF typically negotiates first with governments that are in financial trouble about the amount and condition of loans.

Strauss-Kahn said US$500 million in new IMF funding would be available by the end of this year, including money already offered by the European Union and Japan and expected pledges from the United States, Russia and China.

He welcomed the G20 decision to support a possible increase in "special drawing rights" worth US$250 billion.

Special drawing rights are an IMF-backed money equivalent that can be exchanged for hard currency, and their expansion should allow cash-strapped IMF member states greater access to financing.

US to see upturn

"This confirms the conversion of the new American administration to a more multilateral approach in international relations," he was quoted as saying.

Asked when to expect the global economy to start improving, Strauss-Kahn was quoted as saying, "The upturn will first be seen in the United States."

He said US housing prices would be the key sign to watch, and that they are "not far from bottoming out, which is where our forecast for a recovery in the first half of 2010 comes from."



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