Peter Costello

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Australia to Provide $2 Million to IMF to Assist Countries Following Natural Disasters

NO.062

Joint Release by the Treasurer and the Minister of Foreign Affairs and Trade

AUSTRALIA TO PROVIDE $2 MILLION TO IMF TO ASSIST COUNTRIES FOLLOWING NATURAL DISASTERS

The Treasurer and the Minister for Foreign Affairs are pleased to announce that the Australian Government will contribute $2 million to the International Monetary Fund (IMF) for its account for concessional emergency assistance following natural disasters.

The announcement follows a recent decision by the IMF to subsidise loans to low-income countries in need of urgent financing following a natural disaster. Eligible low-income countries can request that the IMF’s concessional interest rate (currently 0.5 per cent) apply to their loans. Previously, the IMF’s standard rate of charge applied to these loans.

The IMF has been providing emergency loans to countries with urgent balance of payments financing needs in the wake of natural disasters since 1962. The IMF’s emergency assistance is designed to be quick-disbursing and the funds are repayable within 3 to 5 years.

The resources required by the IMF to finance the concessional assistance will be provided by bilateral donors. The $2million pledged by the Australian Government through the aid programme will assist the IMF in offering this reduced rate to low-income countries.

The IMF has approved requests for concessional assistance to Sri Lanka and the Maldives, following the devastating Indian Ocean tsunami which hit those countries at the end of 2004.

CANBERRA
7 June 2005

Contact: David Alexander
02 6277 7340

 

7 Jun 2005

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