TUESDAY, JULY 1, 2003
India turns a creditor to IMF
AP
NEW DELHI: India has joined the pool of lenders to the International Monetary Fund, shedding its decades-old image as a borrower from multilateral bodies, the country's central bank has said.
The IMF had selected India for the first time to become a member of its Financial Transaction Plan, which helped bail out poor countries facing currency crisis or risks of defaulting on foreign loans, the Reserve Bank of India said in a statement released on Saturday.
The statement attributed the IMF's decision to India's strong balance of payments and its high level of foreign exchange reserves, which stood at $82.12 billion in the week ended June 20.
India had transferred 205 million Special Drawing Rights, worth $291.7 million, to the IMF in two tranches in May and June, the central bank statement said. Special Drawing Rights are the IMF's artificial currency units used to supplement members' reserve assets and determine their loan availability.
"With this development, India has become a creditor to the IMF," it said.
India's contributions to the IMF come about a decade after the country borrowed $2.5 billion from the multilateral body to tide over a balance of payment crisis in 1991, which was triggered by rising oil prices and a sudden flight of capital by NRIs.
India also signed agreements with the Fund and the World Bank to undertake economic reforms, which included measures to liberalise trade and privatise.
The Indian economy has since bounced back, becoming one of fastest growing economies in the world. India's gross domestic product has grown annually by an average of around 5 per cent in the past three years.
India had also paid back all of its IMF loans by 2000.
The government has been making efforts in recent months to pay back loans taken from other donor agencies. It has also offered bilateral aid for several countries like Suriname, Sri Lanka, Afghanistan and Nepal in the past year.
These moves, analysts say, are part of New Delhi's strategy to play a bigger role in international affairs, including bagging a permanent seat in the UN Security Council.
Other contributors to the Financial Transaction Plan are developed nations such as the US and Japan.
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