RTTNews - The International Monetary Fund's Executive Board Wednesday approved a framework for the issuance of notes to member countries and their central banks, for the first time ever, in order to attract additional sources of income for lending purposes in the face of the global crisis.
Under this framework, members may sign agreements to purchase IMF notes up to a limit set by the member, the IMF said. The principal of the notes would be denominated in Special Drawing Rights or SDRs, a basket of four major currencies, consisting of the U.S dollar, Euro, Japanese Yen and the Pound Sterling. The notes would have a maximum maturity of five years, similar to the IMF's lending under the Stand-by and the Flexible Credit Line Arrangements.
Several countries have already expressed their interest in buying IMF notes, with China expressing its intention to invest up to US$50 billion. Brazil and Russia have agreed for an amount up to US$10 billion each.
This innovative framework will further strengthen the IMF's capacity to bring rapid assistance to its members as and when it is needed, Managing Director Dominique Strauss-Kahn said in a statement.
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