Forex News – Euro jumps as IMF proposes to boost lending resources by $1 trillion

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The euro spiked versus the dollar in reaction to news that the IMF is proposing to boost its lending resources by $1 trillion.

EURUSD jumped to 1.2843 from 1.2786 at around 10:15 GMT.

The Washington-based  international lending organization is hoping that the expansion of its lending resources will safeguard the global economy against any worsening of the European sovereign debt crisis, according to an IMF official.

The IMF is pushing China, Brazil, Russia, India, Japan and oil-exporting nations to be the top contributors, according to the official.

The IMF is hoping to strike an agreement at the upcoming meeting of G-20 finance ministers and central bankers in Mexico City, on February 25 and 26.

However, there might be one sticking point. The U.S. has said it has no plans to make new bilateral loans and G-20 leaders ended last year at odds over the issue. Meanwhile euro-region nations have already pledged to contribute 150 billion euros ($192 billion).

“The biggest challenge is to respond to the crisis in an adequate manner and many executive directors stressed the necessity and urgency of collective efforts to contain the debt crisis in the euro area and protect economies around the world,” IMF chief Christine Lagarde said yesterday in an e-mailed statement.