NO.062

Joint Release by the Treasurer and the Minister of Foreign

Affairs and Trade

AUSTRALIA TO PROVIDE $2 MILLION TO IMF TO ASSIST COUNTRIES FOLLOWING NATURAL

DISASTERS

The Treasurer and the Minister for Foreign Affairs are pleased to announce

that the Australian Government will contribute $2 million to the International

Monetary Fund (IMF) for its account for concessional emergency assistance following

natural disasters.

The announcement follows a recent decision by the IMF to subsidise loans to

low-income countries in need of urgent financing following a natural disaster.

Eligible low-income countries can request that the IMF’s concessional

interest rate (currently 0.5 per cent) apply to their loans. Previously, the

IMF’s standard rate of charge applied to these loans.

The IMF has been providing emergency loans to countries with urgent balance

of payments financing needs in the wake of natural disasters since 1962. The

IMF’s emergency assistance is designed to be quick-disbursing and the

funds are repayable within 3 to 5 years.

The resources required by the IMF to finance the concessional assistance will

be provided by bilateral donors. The $2million pledged by the Australian Government

through the aid programme will assist the IMF in offering this reduced rate

to low-income countries.

The IMF has approved requests for concessional assistance to Sri Lanka and

the Maldives, following the devastating Indian Ocean tsunami which hit those

countries at the end of 2004.

CANBERRA

7 June 2005

Contact: David Alexander

02 6277 7340