IMF to Seek $100 Billion from Japan for Bailouts
The International Monetary Fund (IMF) is expected to borrow US$100 billion from Japan in order to meet projected bailout needs.
Also, the IMF may issue bonds, which it has never done before, or seek direct assistance from governments not currently overburdened with bailouts of their own.
Geared towards assisting developing economies, the IMF has been stretched to its limit in bailing out Iceland, Ukraine, Hungary, Latvia, and other developed nations struck by the deepening economic quagmire that started with the US mortgage crisis.
Dominique Strauss-Kahn, the fund’s managing director, has already said it needs to double its available resources, and that the fund was exploring options for further lending to cash-poor nations totaling about half a billion dollars in the next six to eight months.
The Japanese pledge for financing was first broached at the Group of 20 summit meeting in Washington in November, and the fund’s executive board will formally take up the need for additional money at its scheduled board meeting in Washington on Tuesday, said Bill Murray, a fund spokesman.
Meanwhile, Japan has troubles of its own, as industrial output has dropped nearly ten percent.
Japan's Economics Minister Kaoru Yosano said the situation was unprecedented and that the drop in factory output "was likely to continue".
The unemployment rate also rose in December to 4.4%, a three-year high.