News Briefs
France and the IMF
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The IMF Signs a Borrowing Agreement with
the Caisse Francaise de Développement of France
Mr. Michel Camdessus, Managing Director of the International
Monetary Fund (IMF), and Mr. Edmond Alphandery, Minister of Economy, have
signed an exchange of letters on the terms of the contribution by France
to the enlarged and extended enhanced structural adjustment facility
Trust (ESAF).1
France's loan and subsidy contribution will be
extended through the Caisse Francaise de Developpement (CFD). Mr. Michel
Camdessus and Mr. Philippe Jurgensen, Director General of the Caisse
Francaise de Developpement, have signed a borrowing agreement for SDR 750
million (about US$1.1 billion) for the enlarged and extended enhanced
structural adjustment facility Trust (ESAF). The IMF is the trustee for
the ESAF Trust, and France is one of the largest contributors, both to
the ESAF Loan Account and in terms of its subsidy contribution to the
ESAF, amounting to SDR 250 million (about US$366 million).
The IMF has been responding to the balance of payments difficulties
facing many low income developing countries by providing concessional
financing through the ESAF. Under it, loans are made to low income IMF
member countries undertaking three year economic reform programs to
strengthen their balance of payments and improve growth prospects. The
experience of low income countries - mainly in Africa but also in Asia
and Latin America - undertaking economic adjustment programs supported
by ESAF arrangements has been generally favorable. From a very weak
starting position, many of the countries implementing ESAF-supported
programs have experienced improvements in real GDP growth, trade volume
growth, and reductions in inflation and debt burdens.
Operations under the ESAF commenced in December 1987 with agreements
with creditors providing SDR 5.1 billion in funding for the facility.
In December 1993, the Executive Board of the IMF decided to extend the
duration of the ESAF facility and enlarge the ESAF Trust with lending in
an additional amount of SDR 5.0 billion (about US $7.3 billion) and
subsidies in an additional amount of SDR 2 billion (about US$2.9
billion). Operations under the enlarged ESAF Trust were initiated in
February 1994.
Work on most of the necessary arrangements for loan and subsidy
contributions to the enlarged ESAF by a broad range of the IMF's
membership is now essentially completed. |
