India ready to lend up to $10 billion to IMF: Mukherjee
05 Sep 2009
In order to enhance its role in the international financial forum and get a greater say in the global economic arena, India is planning to invest up to $10 billion (around Rs50,000 crore) in the International Monetary Fund (IMF).
"India has decided to invest up to $10 billion of its reserves in notes issued by the IMF," Indian finance minister Pranab Mukherjee said in London yesterday, after a meeting of the finance ministers of Brazil, Russia, India and China (BRIC).
The Indian pledge is part of a total of $80 billion that the four BRIC countries will invest into the IMF in order to replenish its fund aimed at helping out countries that are struggling in the current financial crisis.
China will account for $50 billion of this amount, and the rest will be borne by India, Russia and Brazil.
A few months back, The Wall Street Journal quoted planning commission deputy chairman Montek Singh Ahluwalia as saying that India is ready to buy about $10 billion of IMF bonds.
''If the IMF can issue the securities, it's an easy way for us to make a contribution,'' said Ahluwalia.
Ahluwalia told the Journal that buying bonds is a better alternative for India than making the IMF a loan as Japan has done. That's because the Indian central bank could simply purchase the bonds and hold them in its reserves. That wouldn't require separate Indian government approval.
