NEW YORK, Nov. 17 (Agencies) – The IMF chief says the lending agency needs more funds if it is to help the global economy recover from the current financial crisis.
The International Monetary Fund managing director, Dominique Strauss-Kahn, in an interview with the BBC urged countries to continue cutting interest rates, noting that the IMF was likely to need at least $100 billion of extra funding over the next six months.
"In some parts of the world -- Japan, the United States -- interest rates have been cut very much, but it can be done more aggressively in other parts," he said, adding that the European Central Bank (ECB) in particular had room for further rate cuts.
The director of the world's international lender of last resort explained that "the number of countries having problems at the same time has dramatically increased and they come to the IMF asking for support. So we need more resources."
The comment came as Japan - the world's second largest economy - and the 15-nation Eurozone announced that they have officially entered recession.
On Saturday, leaders from the leading industrial and emerging economies met at the G-20 summit in Washington where they agreed to cooperate closely to stimulate economic growth and increase government spending.
At the meeting, Japan announced that it would be willing to lend the IMF up to $100 billion and encouraged China to follow suit. Saudi Arabia, which boasts of large foreign exchange reserves, was also called upon to help but opted to focus on domestic expenditure.
Japan has argued that more funds must be made available to the IMF in case the effects of the current financial turmoil continue to spread.
Strauss-Kahn said that the IMF was close to finalizing a loan deal with Turkey, following an announcement last week that a $7.6 billion emergency loan had been agreed with Pakistan in order to stave off a balance-of-payments crisis.
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