Brazil says it will contribute funds to the IMF

December 1, 2011 - 3:55 PM
Brazil Economy

IMF Managing Director Christine Lagarde, right, speaks during a news conference as Brazil's Economic Minister Guido Mantega looks on in Brasilia, Brazil, Thursday Dec. 1, 2011. Lagarde is on her first official tour of Latin America and will visit Peru, Mexico and Brazil. (AP Photo/Eraldo Peres)

BRASILIA, Brazil (AP) — Brazil is willing to contribute funds to the International Monetary Fund to help minimize the effects of the European debt crisis, Finance Minister Guido Mantega said Thursday.

Mantega made his comments after meeting with IMF Managing Director Christine Lagarde. Brazil was Lagarde's last stop on a Latin American tour that has also included visits to Peru and Mexico.

"This time, the IMF did not come here bringing money as in the past," Mantega told reporters. "This time it came to ask Brazil to lend it money and I prefer to be a creditor than a debtor."

Brazil endured decades of lectures from the developed world about its spendthrift ways. But it now has one of the world's fastest growing economies.

Mantega said the amount Brazil will lend the IMF will be decided in a February meeting of the BRICS countries (Brazil, Russia, India, China and South Africa).

Lagarde said the European crisis will affect countries in other parts of the world and said that Brazil's offer to contribute funds to the IMF was encouraging.

She said no country was immune the crisis but that Brazil was in a stronger position to withstand its effects because of the country's policies.

"The marked resilience of the Brazilian economy is the product of a strong track record of competent macroeconomic management based on the three pillars of fiscal responsibility, inflation targeting and flexible exchange rate, " Lagarde said in a statement. "In the last few years, Brazil has also benefited from a solid and well-capitalized banking sector, which has so far softened the impact of one important channel of contagion from the global financial crisis."

"But that is not to say Brazil is immune to the crisis. In our highly interconnected world, nobody is," she added.

Earlier in the day Lagarde met with President Dilma Rousseff but details of their talks were not disclosed.