Brazil does not intend to tap a credit line launched by the International Monetary Fund for emerging markets and will propose at the upcoming G20 meeting a massive capitalisation of the institution, its finance minister said on Tuesday. Finance Minster Guido Mantega also urged the IMF to offer new credit lines to countries lacking liquidity.
"The goal is not for us to tap that, we are not in need." The comments coincide with the IMFs overhaul of the way it will lend to member countries in the wake of a worsening global economic crisis. It also created a new flexible credit line for certain emerging economies. The new Flexible Credit Line would replace a Short-Term Liquidity Facility approved in October for countries with good financial track records and increase the pool of money available to them, with no strings attached.
Brazil, which paid off its debt with the IMF in 2005, said in October it would not draw on the Short-Term fund although it welcomed the new facility aimed at helping emerging markets. Emerging economies have accumulated large international reserves over the past decade but the global credit crisis has forced them to tap those funds to protect their currencies and help bolster their economies.
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