NZ agrees to lend up to US$1 bln to IMF if needed

Finance Minister Bill English has announced New Zealand has agreed to lend the International Monetary Fund (IMF) up to US$1 billion (NZ$1.34billion) if the world faces another economic crisis. "New Zealand’s commitment is a part of the US$550 billion expansion of the IMF’s financial resources to make the IMF better able to support the international financial system during times of significant crisis," English said. The expansion follows the IMF's commitment over the weekend to bail out Greece in tandem with the Eurozone. He added the commitment would only be called upon if needed and "only if the IMF has exhausted all other options." "This is part of a backstop arrangement. We don’t have to provide the funds now but this commitment does create a contingent liability for the Crown, which will appear on the Government's books later this year," English said. New Zealand is one of about 40 countries contributing to the IMF in this way. The facility similar to New Zealand’s other contingent liabilities to the IMF, which total US$1.4 billion. Included in those liabilities is US$265 million lent to the IMF as part of a range of measures to help it support countries facing balance of payments problems caused by the global economic crisis.