NZ raises IMF commitment to $4.1B on Euro-jitters 19 Jun 2012
- MARKET CLOSE: NZ shares mixed as Chorus rebounds Business
- NZ dollar heads for 1.2 percent weekly gain vs. Aussie Business
- Infratil seeks up to $100 mln in new five-year bond issue Business
- Back to Back Golds for Adam Hall Living
- Minister opens Tasmanian Devil exhibit News
- Wool Equities, Primary Wool Coop in tie-up talks Business
- NZ consumer confidence near four-year high Business
- Television co-production agreement with China progresses News
- Green lobby cries foul on draft EEZ oil exploration rules Business
- CORRECT: NZ manufacturing activity grows in November Business
New Zealand is committing to lend the International Monetary Fund another $1.26 billion in the event of global economic turmoil, ahead of announcements expected from today's G20 meeting in Mexico on measures to counter the ongoing Eurozone debt crisis.
The latest US$1 billion (NZ$1.26 billion) commitment is the second such additional commitment in two years, and brings New Zealand's total potential lending to the IMF to NZ$4.1 billion, although the global lending agency has so far only drawn down $320 million from New Zealand.
The last additional commitment, also of $1.26 billion, was in 2010 to support the so-called New Arrangements to Borrow deal, which was organised to stem European debt troubles.
The funds are a loan to the international community, are repayable with interest and may never be drawn on fully, but the request for a further commitment underlines the ongoing fragility of global economic conditions because of the political and economic crisis in the 21 countries of the Eurozone.
Despite Greek elections producing an apparently pro-euro result on Sunday night, interest rates continue to soar on the debt of other, much larger European economies, particularly in Spain. Mounting fears of the need for a full "sovereign rescue" for the Spanish economy sent the country's interest rates to a euro-era high of 7.28 percent overnight.
Interest rates above 6 percent are considered unsustainably high.
While New Zealand's IMF commitment is not earmarked for any particular part of the world, Finance Minister Bill English referred to Europe in his statement announcing the additional commitment.
"It's our expectation that Europe will continue to find solutions to its problems, but the IMF has a role in underpinning global certainty," he said.
A number of G20 countries had made additional IMF commitments in April, and more are expected at the meeting of the world's 20 largest economies in Los Cabos, Mexico, this week. The approach to New Zealand for additional commitments was made last week, English said.
"The new loan facility will be recorded as a contingent liability in the government's financial statements for the year to June 30 2012. However, it will have no impact on the government's track to surplus," he said.
As a small, open economy with high exposure to international trade and "one of the most indebted developed countries in the world", it was in New Zealand's interests to contribute to measures intended to produce a "stable, prosperous global economy."
12 Dec 2013 News
New Zealand Government Hon Amy Adams Minister for Communications and Information Technology 12 December... more
12 Dec 2013 Business News
Article - BusinessDesk Export concentration into China ‘a concern’, RBNZ’s Wheeler says By Paul McBeth Dec.... more
12 Dec 2013 Business News
Article - BusinessDesk Perpetual, Fonterra’s largest unitholder, happy to ride out short-term pain for longer-term... more
11 Dec 2013 Entertainment
Sounds Like Waitangi - Greg Johnson, Andrew Fagan & Peter Urlich headline Waitangi Day at Mangawhai Tavern Sounds Like Waitangi... more
10 Dec 2013 Lifestyle
Dunedin City Council Here’s Your Chance to be a Rock Star! Dunedin (Tuesday, 10 December 2013) – If you’re a... more
12 Dec 2013 Property
New Zealand Government New 32-unit complex opened in Johnsonville Housing Minister Dr Nick Smith today officially opened 32 new ... more
10 Dec 2013 Migration
Doing Our Bit Costs, benefits, rugby and refugees Murdoch Stephens – Doing Our Bit (www.doingourbit.co.nz) Amongst all... more
12 Dec 2013 Travel & Tourism
New Zealand Government Hon Nathan GuyMinister for Primary Industries 12 December 2013 Government Industry Agreements to strengthen... more
12 Dec 2013 Sport
Westpac Halberg Awards 12 December 2013 Strong Competition for New Zealand’s Top Sports Honours 58 nominations received for... more
10 Dec 2013 Column
Column - Gordon Campbell Gordon Campbell on the latest TPP leaks, and our shabby treatment of asylum seekers by Gordon ... more
9 Dec 2013 People
In less than a year, Lorde has gone from a Year 12 student at Auckland's Takapuna Grammar to a global pop star. The Kiwi's... more
11 Dec 2013 Recruitment
CPIT For immediate release 11/12/2013 Partnership provides much needed skills for the rebuild As the demand for rebuild workers... more