[Peptobismol]

IMF has started to write off loans routinely since 2005, starting from the African countries to Pakistan. The British has advocated IMF to sell off some of its Gold reserves to finance such write off but IMF didn't use that. Apparently, G8 has been consulted not only because they are the main stake holders but rather, some requirements of them to exercise write off of loans to IMF were needed to execute that. That is why England suggested selling off the Gold reserves to finance that instead but failed.

If you observed, even Japan has written off debts to Burma under the blanket of IMF initiated loans. IMF may not come up with its own funds directly when they issue loans to countries but instead, make a concerted efforts to arrange loans contributed by various countries and their banks.


Goh Meng Seng

The fact is that the IMF doesn't routinely write off loans. It gets repaid more often than be forced to incur losses. A careful anaylsis of the Fund's accounts will be revealing. Therefore, the Fund has never required any of creditor nation to incur a loss. I would add that IMF pledges (of the kind that S'pore entered into) have very strict covenants that forbid the IMF from even suggesting that the creditor nation voluntarily forgive the loan.