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House panel approves IMF funding with tough conditions

WASHINGTON, March 24 Kyodo

The U.S. House Appropriations Committee approved a bill Tuesday authorizing 18 billion dollars in additional U.S. contributions to the International Monetary Fund (IMF) with tough conditions imposed on the international lending agency.

The legislation needs a winning vote on the House floor and approval in the Senate before it can move to the White House for the president's signature.

The funding, requested by President Bill Clinton, comprises 14.5 billion dollars for increasing the IMF's capital and 3.5 billion dollars for setting up the New Arrangements to Borrow, a new emergency credit line to be furnished by major contributors to the fund.

Clinton has underscored the need to replenish IMF resources drained by multibillion-dollar rescue packages released for ailing Asian countries in the past.

The bill attaches a provision which would require the IMF to obtain member countries' approval on reform conditions the lending agency sets for recipient countries. A lack of such approval would prohibit the IMF from extending aid exceeding 500 million dollars to these countries.

Treasury Secretary Robert Rubin sent a letter Tuesday to Appropriations Committee Chairman Bob Livingston, calling for an easing of the condition.

Earlier this month, the House Banking and Financial Services Committee passed a similar bill. But conditions set on the proposed U.S. funding to the IMF are different from those approved by the Appropriations Committee.

The Senate on Tuesday discussed a compromise bill that would grant the IMF a U.S. contribution of 18 billion dollars as long as the world's major nations agreed to help Washington reform the lending agency.

The Senate will resume debate Wednesday for voting.
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Publication:Asian Economic News
Date:Mar 30, 1998
Previous Article:U.S. releases humanitarian aid to Indonesia
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