UPDATE 2-Brazil to propose more IMF, trade funding at G20

Tue Mar 24, 2009 4:47pm EDT
(Recasts, adds details, context)
BRASILIA, March 24 (Reuters) - Brazil does not intend to tap a credit line launched by the International Monetary Fund for emerging markets and will propose at the upcoming G20 meeting a massive capitalization of the institution, its finance minister said on Tuesday.
Finance Minster Guido Mantega also urged the IMF to offer new credit lines to countries lacking liquidity.
"The goal is not for us to tap that, we are not in need."
The comments coincide with the IMF's overhaul of the way it will lend to member countries in the wake of a worsening global economic crisis. It also created a new flexible credit line for certain emerging economies.
The new Flexible Credit Line would replace a Short-Term Liquidity Facility approved in October for countries with good financial track records and increase the pool of money available to them, with no strings attached.
Brazil, which paid off its debt with the IMF in 2005, said in October it would not draw on the Short-Term fund although it welcomed the new facility aimed at helping emerging markets.
Emerging economies have accumulated large international reserves over the past decade but the global credit crisis has forced them to tap those funds to protect their currencies and help bolster their economies.
Mantega said Brazil will propose at an upcoming G20 meeting of leading emerging and developed economies that funding for the IMF be increased by $500 billion to $1 trillion.
"Brazil may even add (funds)," Mantega said but added it was important that countries with large dollar inflows like China and the United States increase their contributions.
He will also propose at the G20 meeting that the IMF offer a $100 billion credit line aimed at financing international trade.
Mantega said earlier in March that Brazil, Russia, China and India -- the so-called BRICs-- would contribute no extra money to the IMF until they have bolstered their voting power at the agency.
The proposal is part of Brazil's wider attempt to increase its presence on the global stage and in international institutions -- a cornerstone of Brazilian President Luiz Inacio Lula da Silva's foreign policy. (Reporting by Isabel Versiani; Writing by Ana Nicolaci da Costa; Editing by Raymond Colitt and Kenneth Barry)