The fund stated that it would seek to tap China, Brazil, Russia, India, Japan and oil exporting nations for contributions.
Each individual country’s contribution is yet unclear but FC Exchange said it seemed apparent that the IMF had specifically targeted surplus driven economies and those that had been growing fast through thriving export sectors.
Expanding the fund by $1trn from its current $385bn capacity has provided a huge boost in confidence with stocks and the Euro rallying on the news with borrowing costs squeezing lower, coming in light of a recent report from the World Bank that global growth is being held hostage by the European debt crisis.
Initial reaction that more resources are being sought to help resolve the situation has been taken positively, as it could act as the much needed backstop that markets have been longing for.
FC Exchange said: “This certainly has the ability to structurally change the perception of the Euro and whilst it will not necessarily be earmarked entirely for Europe, the very fact that it is there, ready and waiting, and can be used, is likely to provide much needed confidence.
“The aim of this will undoubtedly be to cap the rising yields of peripheral euro nations and whilst this could perhaps signify a corner being turned in the fight against European debt issues, the devil, as always, will undoubtedly be in the detail.”
