The IMF was forced to turn to the GAB, a fund devised in 1962 to defend the world monetary system, because its ordinary reserves were drained by multibillion-dollar bailouts for Indonesia, South Korea and Thailand. "Put simply, our liquidity position is such that we have to draw on our reserve tank," Stanley Fischer, the IMF's first deputy managing director, said.

Since arranging the three Asian bailouts, the IMF's usable resources have dropped to $31 billion, IMF treasurer David Williams said. But when loans to Russia and other countries are taken into account, the IMF would have only $17 billion, not enough to support muchfurther lending. The US treasury department had recently estimated IMF usable resources at $10-15 billion. "We are in grave difficulties," Fischer said.

"After these loans, our liquidity ratio is below the number that we feel comfortable with. Even with the GAB, we don't regard ourselves as having lendable resources... It cannot continue this way."

To deal with future financial emergencies, the IMF has asked member states to replenish its reserves. US president Bill Clinton has been trying to convince the US Congress to pay Washington's financial share, which totals $18 billion and includes $3.5 billion for the new arrangements to borrow (NAB), a facility that would back up the GAB. But the IMF package has been stalled in the Republican-controlled House of Representatives. Under IMF rules, proposals to increase resources cannot go ahead until the United States approves its share. Washington has 18 per cent of IMF votes -- an effective veto over some policy decisions which need an 85 per cent majority.