Curbing loans: US lends support for increase in World Bank funding
Mnuchin praises World bank's decision to significant shift lending to poorer clients
PHOTO: REUTERS
WASHINGTON:
US Treasury Secretary Steven Mnuchin signalled Washington would support the World Bank request for a sharp increase in lending capacity in exchange for reforms to curb loans to higher income countries like China. The United States rejected the World Bank request in October but on Saturday Mnuchin praised the progress the institution was making, notably the plan “to significantly shift lending to poorer clients.” While he did not mention China by name, Mnuchin applauded the shift to a “new income-based lending allocation target and the re-introduction of differentiated pricing” for loans - meaning wealthier countries would pay higher interest rates. The World Bank is seeking a $13 billion capital increase, according to press reports. The last increase occurred in 2010 and added $5 billion to the bank’s capital.
Published in The Express Tribune, April 22nd, 2018.
US Treasury Secretary Steven Mnuchin signalled Washington would support the World Bank request for a sharp increase in lending capacity in exchange for reforms to curb loans to higher income countries like China. The United States rejected the World Bank request in October but on Saturday Mnuchin praised the progress the institution was making, notably the plan “to significantly shift lending to poorer clients.” While he did not mention China by name, Mnuchin applauded the shift to a “new income-based lending allocation target and the re-introduction of differentiated pricing” for loans - meaning wealthier countries would pay higher interest rates. The World Bank is seeking a $13 billion capital increase, according to press reports. The last increase occurred in 2010 and added $5 billion to the bank’s capital.
Published in The Express Tribune, April 22nd, 2018.