Its board recently approved an extension of its standing arrangements to borrow from governments and central banks by more than $500 billion.
The IMF adopted new procedures to dole out money quickly to cash-strapped members, and began organising a special fund, the "new arrangements to borrow", which could quickly raise money to help a country cope with a currency crisis.Thailand put these arrangements to the test.
Its additional line of credit with its members (dubbed the "New Arrangements to Borrow", or NAB) would shrink.
If two or three big countries suddenly demanded money back, it could run out of cash.That is why it has tapped its "General Arrangements to Borrow", a reserve tank of 17 billion SDRs that it can borrow from a group of 11 rich countries.
The majority of the current funding request is for what is known as the IMF's "New Arrangements to Borrow," or the NAB.
The bill also provides for loans to the IMF, as requested, to enable the U.S. to increase its share of the New Arrangements to Borrow, which establishes a set of credit lines extended to the IMF, from approximately $10 billion6.6.6 billion in SDRs) to the equivalent of $100 billion.
[Page C8.] Qwest Communications International announced arrangements with bankers to borrow $750 million, ending concerns that it could be forced into bankruptcy before the end of the year.
Over all, the arrangement typically allows countries to borrow at rates several percentage points below the market level, while attaching tough conditions on spending and requiring government overhauls.
In 1999, for example, Citigroup created a Delaware-based entity called Buconero, the Italian word for black hole, as part of a complex arrangement that allowed Parmalat to borrow about $140 million without recording it as debt on its balance sheet.
The arrangement will allow ministers to borrow money from an investor over a fixed period of time for a pre-determined interest rate.
