The International Monetary Fund agreed to extend the global debt relief program for poor countries by two years to 2006, the global lender said late on Thursday.
The move increases momentum for erasing debts that are blamed for stifling development in impoverished nations, most of them in Africa. It also comes as rich industrialised nations like the United States and Britain look at ways of possibly writing off all of the debt of some nations.
The IMF's board of shareholder governments said in a statement it agreed to prolong the Heavily Indebted Poor Countries initiative, launched by the IMF and World Bank in 1996, to give more countries time to qualify for the scheme.
"(IMF) directors agreed with the objective of bringing within the HIPC initiative all poor countries with current unsustainable debts, while preventing the initiative from becoming a permanent facility," the IMF said in a statement.
Twenty-seven countries have qualified for HIPC, of which 14 have received maximum permitted debt relief and 13 others have started to receive some debt write-off.
Earlier on Thursday, US Treasury Secretary John Snow proposed up to 100 percent forgiveness of some debts, the first time a Bush administration official has suggested writing off all the debts of some countries.
IMF Managing Director Rodrigo Rato also said on Thursday more aid was needed for poor countries, including debt relief. He also said he was willing to analyse a British proposal to revalue the IMF's huge gold stocks as a means to raise money for added debt relief.
The IMF board expressed concern about keeping open the list of countries eligible for HIPC debt relief, given the limits on financing.
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