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WASHINGTON: The International Monetary Fund (IMF) on Thursday projected its budget deficit would rise to US$242 million in the 2009 fiscal year, after a loss that was not as bad as expected in the past year.
The fiscal year ended this past April closed with a deficit of US$89 million, after a series of reorganisational moves that averted a projected deficit of US$234 million.
"This improvement stemmed primarily from the strong performance of the Fund's investment portfolio comprising primarily fixed-income securities, the one-time income effects associated with the settlement of overdue charges following Liberia's arrears clearance, and lower expenditures," the IMF said in a statement.
The IMF has eliminated several hundred jobs with 591 opting for voluntary separation program and is also in the process of taking other measures, including the sale of a portion of its gold reserves. But the latest budget projections do not include any income from gold sales.
The IMF, the lender of last resort to countries in financial crisis, has seen its own finances strained as more nations emerge from turmoil.
The decision of Argentina and Brazil and other big borrowers to repay their IMF loans and decline the conditions set by the organisation has also led to a shortfall in its income. Indonesia and the Philippines are also among those repaying IMF loans ahead of schedule.
The Washington-based IMF still has some US$9 billion in reserves of gold and cash to keep it operating.
The IMF also moved to lower the rate for its non-concessional loans - those given to all but low-income countries - to 100 basis points above its base special drawing rights rate. The current SDR rate is 2.99 per cent.
"The decision marks an important step toward implementation of the new income model," the organisation said.
- AFP/yb
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