Christine Lagarde, managing director of the International Monetary Fund (IMF), says the fund is offering zero interest loans to all its members facing economic challenges.
Speaking at a press briefing in Washington on Thursday, Lagarde said economic growth has been too low for too long, and IMF was stepping up with zero interest loan for those in need of loans.
“Prospects for low-income economies may be more challenging with varied outlook. We see growth as too low, too long and benefiting few,” she said.
“We believe that there are more to policies than meets the eyes. By exploiting synergies in policies we can overcome these challenges. We also believe that each country has something to offer.
“My hope is that at the end of these meetings, each finance minister, each governor of central bank will go back home thinking of what to fuel growth. For example, when monetary policy has been overstretched, fiscal policy can step up.
“This will also put in place the structural reforms that are much needed, which have been sorted out in some countries, but which are still lacking in other places.”
The bank said it would give the zero interest rate loans for as long as it is needed around the world.
“So, what does it mean for the IMF? It means that if we want to improve the inequality issue, we must have a strong international safety net.
“In this context, I am pleased to reveal that our board recently approved the extension of zero interest rate on all concessional facilities from 2016 to 2018, and thereafter, if there is need for extension.
“That is really important for low-income countries to be able to actually absorb the shocks without necessarily going to the international markets or relying on bilateral lending capacity of close to a trillion dollars by extending access to bilateral borrowing agreements.
“The new agreements that are being signed this week will run at least through the end of 2019, and will continue to serve as a third line of defence.
“As you know the first line of defence is quota, second line is New arrangements to borrow, and the third line of defence will be those bilateral loans.”
She said member countries had so far given $344 billion in pledges, while the fund looks forward to others joining the effort.
Nigeria has insisted on not taking an IMF loan, but funding its fiscal deficit from within, employing creative solutions to national challenges.