Brasília – Brazil is going to increase its allocation of funds to the special line that is going to aid the International Monetary Fund (IMF), as announced today (25th) the Brazilian minister of Finance, Guido Mantega. According to him, the country is going to raise the total amount of funds to be passed on to the fund from US$ 10 billion to US$ 14 billion.
According to the minister, the measure was necessary so that the BRICs (Brazil, Russia, India and China) could increase their share of the special line of credit to 15%, which would grant the bloc veto powers on decisions, which require the approval of at least 85% of the members.
Comprised of funds from 28 different countries, the new line of credit will total US$ 600 billion, approximately 2.5 times more than the total of US$ 250 billion that the IMF is able to loan. Known as NAB (New Arrangements to Borrow), the line aims to provide aid to the IMF, so that it may grant loans to the countries affected by the economic downturn.
Mantega also announced that the US$ 14 billion are not going to leave Brazil. Only when the funds are requested and the loans passed will the money gradually exit the country. "The funds stay in the country and are transferred according to the demand. The loan is split according to the shares contributed by each country," he explained.
*Translated by Gabriel Pomerancblum
