IMF members agree to maintain 'supportive' economic policy

ISTANBUL, Turkey, Oct. 4 (Yonhap) -- The global economy is showing signs of an
early recovery thanks to "decisive and concerted" policy actions by each country,
but the member nations of the International Monetary Fund (IMF) will keep in
place their "supportive" economic measures until the recovery is sustainable, its
policy body said Sunday.

The members have also agreed to "work together" to avoid protectionism and push
for a so-called exit strategy that takes into account the circumstances of each
nation, the International Monetary and Financial Committee (IMFC) said in a
communique released after a meeting of its 24-person board of directors in
Istanbul. South Korean Finance Minister Yoon Jeung-hyun was also among them.
"Decisive and concerted policy actions are yielding signs of early recovery. We
commit to maintaining supportive fiscal, monetary, and financial sector policies
until a durable recovery is secured, and stand ready to act further as needed to
revive credit, recover lost jobs, and reverse setbacks in poverty reduction," the
IMFC said.
"We emphasize that agreed financial sector and regulatory reforms should be
completed without delay. We reaffirm our collective responsibility to avoid
protectionism in all its forms," it added.
The IMFC meeting was held on Sunday just ahead of the annual gathering of the
lending organization in Turkey earlier this week.
The meeting between the IMF's board of directors also comes a little more than a
week after the summit talks of the Group of 20 advanced and emerging countries
ended in Pittsburgh, where world leaders agreed to cooperate in withdrawing
measures that have been introduced to stimulate the slumping global economy,
hard-hit by financial turbulence last year.
"As the recovery takes hold, we are committed to work together in articulating
and implementing credible and coordinated exit strategies for the withdrawal of
public support for the financial sector, orderly unwinding of monetary policy
support, and fiscal consolidation needed to underpin long-term sustainability,"
the IMFC said.
"We call on the Fund to develop, by the time of our next meeting, principles for
orderly and cooperative exit strategies taking into account country specific
circumstances, and to advise on the development of exit policies and their
consistency with global recovery and macro-financial stability," it noted.
Touching on the IMF's quota reform, participants officially backed the idea
reached at the G-20 summit to shift at least 5 percent of the IMF voting power
from advanced nations to emerging and developing counterparts, according to the
communique.
"We recognize that the distribution of quota shares should reflect the relative
weights of the Fund's members in the world economy, which have changed
substantially in view of the strong growth in dynamic emerging market and
developing countries," it said.
"In this context, we support a shift in quota share to dynamic emerging market
and developing countries of at least five percent from over-represented countries
to under-represented countries using the current quota formula as the basis to
work from," it added.
The participants agreed to complete the reform of its quota system, which
determines each country's voting share, by January 2011, saying, "Quota reform is
crucial for increasing the legitimacy and effectiveness of the Fund."
For strong and sustained global growth, they also promised to "remain vigilant"
to prevent financial sector excesses and the reaccumulation of unsustainable
global imbalances while backing the need to reinvigorate each nation's structural
reform agendas supported by sound fiscal, monetary, exchange rate, and financial
sector policies.
(END)