IMF widens deficit forecast to 165 mln usd |
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Tue, 01 May 2007 00:07
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WASHINGTON (XFN-ASIA) - The International Monetary Fund said its cash crunch for the next fiscal year would be worse than expected, with a deficit of 165 mln usd.The IMF, which has seen its finances deteriorate because of lower levels of lending and advance repayments by some countries, increased its deficit projection from an earlier estimate of 107 mln usdfor the fiscal year starting May 1.Without any changes, the deficit would increase to 224 mln usd in the 2008 fiscal year, the IMF said.'The income shortfall largely reflects a larger-than-expected decline in IMF credit outstanding, owing to advance repayments by some members during fiscal year 2007,' the statement said. In addition, returns from investments were lower than projected, reflecting the low yields from bonds.The income shortfall 'will be offset against the Fund's reserves,' the IMF said.Despite the higher deficit, the IMF said it would not increase its lending rate to countries in crisis.The IMF, the lender of last resort to countries in financial crisis, has seen its own finances strained as more nations emerge from turmoil.The decision of Argentina and Brazil and other big borrowers to repay their IMF loans and decline the conditions set by the organization has also led to a shortfall in incomes. Indonesia and the Philippines are also among those repaying IMF loans ahead of schedule.The IMF still has some 9 bln usd in reserves of gold and cash to keep it operating. But theorganization has been considering the sale of some of its gold to get cash for other investments that could bring in additional income.The IMF has more than 3,200 metric tons of gold as part of its financial stockpile, but has resisted offloading any of it.afp/mas
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