Japan to offer 300 bn yen in emergency loans to Asian nations

I / Tokyo July 21, 2009, 17:25 IST

Japan will provide up to 300 billion yen (about $2.5 billion) in emergency loans to help Asian economies weather the current global economic crisis, the Foreign Ministry today said.

The loans, which were pledged by Japan Prime Minister Taro Aso during the April 1 global financial summit in London, will not finance specific projects but be channeled to recipient governments facing sharp declines in tax revenues to help them implement necessary policy measures to boost domestic demand and expand growth.

The new type of loans will be delivered to recipients quickly compared with the conventional loans. In principle, they will be given to economies that also receive aid from the World Bank and other multilateral development banks such as the Asian Development Bank.

The emergency loans with floating interest rates will be due for repayment in 15 years. Japan will stop providing such aid to Asian economies at the end of March 2012 because it is an emergency step.

Tokyo last offered such emergency loans to Asian neighbors during the 1997-1998 regional financial crisis.