The International Monetary Fund has almost doubled its "fire power" to protect the world economy against deepening debt turmoil in Europe with the Group of 20 nations, including India, pledging $430 billion in new funding.
The new commitments to the global lender from the world's largest economies to guard against global risks were announced on Friday after a meeting of Group of 20 finance ministers and central bankers gathered in Washington for the spring meetings of the IMF and World Bank.
"This signals the strong resolve of the international community to secure global financial stability and put the world economic recovery on a sounder footing," said IMF managing director Christine Lagarde.
Lagarde said the IMF has also received commitments from Russia, India, China and Brazil. However she said those nations will officially announce the details later. Including those commitments, Lagarde said the overall amount is "north of $430 billion."
"That almost doubles the lending capacity of the fund," she said, estimating that the IMF now has $1 trillion more to lend.
Including pledges announced on Friday from Australia, Korea, Singapore and the United Kingdom, the IMF has secured at least $357 billion in additional loans.
The United States, which is the largest IMF shareholder, has declined to provide additional funds for the institution. The US stands behind nearly 18% of the IMF's resources under the fund's current quota system.
US officials argue that the nation has contributed in other ways to stabilise the global economy.
The IMF is seeking to raise money as it prepares for an estimated $1 trillion in funding needs over the next few years. The fund has warned that the global economy faces serious risks, despite a modestly improving outlook for growth.
"We made a call to action, and our members have delivered," said Lagarde.
Lagarde has called for a "global firewall" to protect the world economy from potential risks. She has urged policymakers to take "collective action" to address the "dark clouds" hanging over the economy.
The additional resources will be available to all IMF members and will be subject to "risk mitigation features," among other conditions to protect creditors.
The funds will be provided as temporary bilateral loans and note-to-purchase agreements, according to a joint statement from the IMF and Group of 20.
The move "shows the commitment of the international community to safeguard global financial stability and put the global economic recovery on a sounder footing," the G20 finance ministers said in a statement.