Governor of the South African Reserve Bank Tito Mboweni has been appointed to a ”committee of eminent persons” to review the finances of the International Monetary Fund (IMF), the IMF announced in Washington on Thursday.
The fund is facing a long-term shortfall in the financing of its administrative budget as the result of a decline in its level of lending.
”The fund’s current financing relies chiefly on the income derived from its lending operations,” said IMF managing director Rodrigo De Rato.
”This has generated adequate income as long as member countries have needed to resort to fund financing, but with members choosing to increasingly rely upon private capital flows, has become out of date,”
He said the committee would provide the fund with an independent view of the available options for ensuring it had a sustainable and a durable income-base with which to finance its running costs over the long term.
The committee will report in the first quarter of 2007.
”There is a need for the fund to broaden its income base. It has a strong balance sheet, and its current level of reserves of $8,8-billion (about R56,4-billion) can finance budgetary shortfalls well into the next decade.
”However, as a result of this declining lending, the fund faces a potential annual-income shortfall on its current administrative budget.”
The fund’s actual loans are financed by contributions from its members, and lending capacity is currently at an all-time high of $200-billion (about R1 282-billion).
Mboweni will join the president of JP Morgan Chase International and former general manager of the Bank for International Settlements Andrew Crockett; president and chief executive of Harvard Management Company, Mohamed El-Erian; former chairperson of the Federal Reserve, Alan Greenspan; governor of the Bank of Mexico, Guillermo Ortez; governor of the Saudi Arabian Monetary Agency, Hamad Al-Sayari; president of the European Central Bank, Jean-Claude Trichet; and governor of the People’s Bank of China, Zhou Xiaochuan. — Sapa