FED: Australia to lend up to $500m for IMF Brazil help = 2

AAP General News (Australia)
12-03-1998
FED: Australia to lend up to $500m for IMF Brazil help = 2

Mr Costello said the loan was an interim measure under the IMFs New Arrangements to Borrow
(NAB), which he chairs, and the funds should be repaid early in the new year.

"They are being provided at an above-market interest rate," Mr Costello said in a
statement.

"Australia will bear no credit risk, but will carry some exchange risk."

Mr Costello said the loan, which would be repayable by the IMF and would bear interest,
would have no impact on the budget because it would be secured by the IMF and repaid.

The treasurer defended Australias assistance for a country far removed from its local
region.

"The focus of Australias bilateral balance of payments support has been in its own
region," Mr Costello said.

"However, our membership of the NAB represents a global obligation and the Brazilian
program is crucial for efforts to control the current international financial crisis, which
began in Asia but has since spread more widely.

"Stability in Brazil is important for stability elsewhere in Latin America and for
stability in the international financial system."

The NAB came into effect just two weeks ago, bringing together 25 developed nations into a
more streamlined operation for assisting with IMF financial rescue packages.

The Brazil package is the first time the NAB has been activated, with members providing
almost $A20 billion.

AAP ss/mfh/ear/mk

KEYWORD: IMF BRAZIL AUST 2 CANBERRA

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