ADB to set up $3 billion fiscal spending fund

I / Nusa Dua(indonesia) May 2, 2009, 15:11 IST

The Asian Development Bank said today it will establish a three-billion-dollar fund to boost developing member countries' fiscal spending capacity amid the global economic crisis.      

ADB President Haruhiko Kuroda announced plans for the new facility at the bank's annual meeting on the Indonesian island of Bali, saying it would provide short-term loans more quickly and more cheaply than existing programmes.      

The Countercyclical Support Facility is subject to approval by the lender's board of governors, who will meet here Monday and Tuesday to discuss the impact of the global downturn on Asia's developing economies.      

"The CSF will provide emergency loans faster and cheaper than under ADB's existing special loan facilities," Kuroda said.      

"I believe this will be a very welcome initiative to assist faltering economies and, most importantly, protect the poor from the worst impacts of the crisis."      

The announcement comes just two days after the board agreed to triple the ADB's capital base, from $55 billion to $165 billion, allowing the bank to boost lending support in the crisis.