Govt borrows $53m exchange from I.M.F.

Press, Volume CXVI, Issue 34107, 20 March 1976, Page 16

Govt borrows $53m exchange from I.M.F.

<N Z Press Association) I WELLINGTON, March 19. j The Government has borrowed ss3m worth of foreign exchange from the International Monetary Fund’s special oil facility. The present Governments! memo to the I.M.F. on its policy intentions said it had; given high priority to the. problems of reducing the defi-> cit in the external accounts and dampening the rate of inflation

"The strategy is to achieve i medium-term adjustment n the economy through real ncome adjustment, export ■xpansion and a reduction in jovernment sector claims on esources.” Announcing this tonight,

the Minister of Finance (Mr Muldoon) said the sum represented the last of the amounts available to New Zealand under the 1975 facility established by the LM.F. Previous drawings from the facility amounted to about $91.8m. Mr Muldoon said the money must be repaid not later than seven years after being made available, or sooner if the balance of payments problem which occasioned the purchase of the foreign exchange was overcome.

Interest rates would vary during the term of the loan, with a maximum of 7j per cent. Two purchases of special drawing rights (S.D.R.) under the 1974 oil facility for the same purpose totalled about $100.5m at the exchange rates than applicable.

The oil facility is a special fund established specifically to deal with the international oil price crisis and is funded almost entirely by members of the Organisation of Petroleum Exporting Countries (0.P.E.C.). The purpose of the facility was to assist countries EEaffected by the oil price increases to maintain trade with developing countries. Without such a facility available, imports from the developing countries could be cut to save funds.