IMF to Raise Funds For Low-Cost Loans to Poor Countries

The IMF Managing Director Christine Lagarde has said that her next focus is to raise funds for the IMF’s Poverty Reduction and Growth Trust (PRGT), which provides low-cost loans to poor countries in Africa, Asia and Latin America.

She urged wealthy countries, which made a profit from the IMF’s sale of 403.3 tonnes of gold last year, to reinvest the windfalls into the PRGT.

“We need more money in that trust if we want to finance concessional loans for the low-income countries,” she said after talks in Washington with African finance chiefs.

The IMF in 2009 set a target to raise $17 billion to lend to the poorest countries. So far, 32 IMF member countries have reinvested profits from the gold sales into the fund.

Lagarde’s comments were aimed at easing concerns that the IMF and donor nations may turn a blind eye to poor countries as they home in on containing the euro zone crisis.

Elizabeth Stuart, a spokeswoman for Oxfam, said poor countries have exhausted their resources to deal with contagion from the rich world, while facing the first drop in aid since 1997.

“Governments are throwing money at the IMF to deal with the European crisis, but where is the money for poor countries?” she asked.

Meanwhile, earlier in March (15–28) IMF mission, led by Catherine McAuliffe, visited Kigali-Rwanda to conduct discussions for the fourth review under the Policy Support Instrument (PSI).

McAuliffe issued a statement, “Rwanda’s recent economic performance has been strong. The growth of real gross domestic product (GDP) exceeded 8% in 2011 and is projected to be in the range of 7.5–8% for 2012 and 2013.