IMF Now Expects To Post Profit For FY09 Amid Demand For Loans
Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- The International Monetary Fund said Friday it expects to turn a small profit in the current fiscal year, as renewed demand for the fund's financial assistance has improved its financial outlook.
The IMF projects net income of about $11 million in the fiscal year ending April 30, 2009, instead of the $294 million shortfall estimated when the reporting period began.
"The fund's income outlook for FY2009 has improved, mainly as a result of new lending activity associated with the turmoil in global financial markets, and -- to a lesser extent -- as a result of stronger-than-projected returns in the fund's investment account," the IMF said following a board review of its income position.
The fund cautioned, however, that the estimate is "subject to considerable uncertainty," depending on the timing of existing arrangements and the potential for new ones.
Lending activity, which had dropped off sharply in recent years, is expected to generate additional income of about $247 million.
The fund has also benefited from a flight to quality in financial markets, with returns on its investment account coming in higher than expected at $267 million during the first half of the year. That is already approaching the $300 million projection for the full year.
Faced with diminishing income from lending activity, the fund's board of governors approved measures last year to create a more sustainable income model, with the help of limited gold sales. Member countries' legislatures are still approving the income changes.
The IMF, which committed to a record amount of financing topping $40 billion in November to struggling countries such as Iceland and Pakistan, said Friday it is contributing EUR1.7 billion to a EUR7.5 billion ($10.68 billion) rescue package for Latvia.
The IMF has said that its $200 billion in lending capacity is enough for now, but Japan has already pledged a $100 billion loan to help the fund and IMF Managing Director Dominique Strauss-Kahn is seeking additional assistance.
-By Tom Barkley, Dow Jones Newswires; 202-862-9275; tom.barkley@dowjones.com
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Publié le 19 Décembre 2008 Copyright © 2008 Dowjones
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