"We have agreed to increase the effectiveness of global funds. Countries that have dynamic and developing markets, such as Indonesia, need to play a bigger role. In this context, I hail Indonesia`s support to the IMF quota," she said during a press conference at the presidential office here on Tuesday.
Lagarde said the support from Indonesia was in line with the commitment made by G-20 leaders during their recent meeting in Los Cabos, Mexico.
She said the financial assistance was neither a gift nor a loan, but would help the IMF support its members, if necessary, during the global crisis.
"The funds will only be used as a second line of defense," Lagarde explained.
She added that the funds were not only for the European region, but also for any IMF member country that faced a crisis.
"It is not like a big bowl for Europe. IMF has 188 members and during a serious crisis no member will be immune. My concern is I have to be able to respond to the needs of the poor, the middle-income, the developing or developed countries," Lagarde said.
Indonesia`s central bank governor Darmin Nasution stated that Bank Indonesia would place its funds in IMF securities as a contribution to the institution`s reserve funds to deal with the global crisis.
"We will still keep the funds in the form of securities and they will remain as the country`s foreign exchange reserve," he said.
Darmin added that the contribution was part of the commitment that Indonesia made at the G-20 Summit in Los Cabos, Mexico, recently.
Leaders of the Group of 20 developing and developed countries agreed in the meeting to cooperate "and contribute to IMF" to overcome the current economic crisis in Europe.
The European crisis has the potential to deeply affect the global economy, so the IMF needs an extra US$430 billion to deal with the crisis effectively.
According to finance minister Agus Martowardojo, Indonesia has agreed to contribute up to US$1 billion. (M041*P008/INE/BSR/YH)