Press Release: IMF Signs US$100 Billion Borrowing Agreement with Japan
February 13, 2009Press Release No. 09/32
Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), and Mr. Shoichi Nakagawa, Minister of Finance of Japan, signed today the terms of Japan's commitment of up to US$100 billion under a borrowing agreement designed to temporarily supplement the Fund's financial resources, which will bolster its capacity to provide timely and effective balance of payments assistance to its members.
The formal signing of the agreement in Rome, Italy, follows the IMF Executive Board's approval of the terms on February 12, 2009. Mr. Taro Aso, Japanese Prime Minister, announced in November 2008 that Japan is prepared to provide supplemental funding to the IMF, to help overcome the current global crisis (see Press Release No. 08/284).
"We are deeply grateful for the Japanese government's support," Mr. Strauss-Kahn stated. "This commitment is the single-largest supplemental financing contribution by an IMF member country ever, and it clearly demonstrates Japan's leadership and continuing commitment to a multilateral approach to global economic and financial challenges. We are hopeful that other countries will join Japan in providing their support to the Fund's efforts."
Japan's total commitment is equivalent to about SDR 67 billion, or 31 percent of total Fund quotas. The Fund's lending capacity was SDR 95 billion (about US$ 143 billion) before the commitment by Japan. The Fund can also draw up to SDR 34 billion (about US$51 billion) from its standing borrowing lines, the New Arrangements to Borrow and General Arrangements to Borrow.
The initial period of the commitment is for one year, and may be extended by the Fund for up to a total of five years if warranted by the Fund's liquidity situation and its actual and prospective borrowing needs. Each drawing will carry interest at the SDR interest rate, which is currently 0.62 percent.