The International Monetary Fund announced that it...

The International Monetary Fund announced that it will lend debtor governments more money if they are hit unexpectedly by higher interest on their old debts. The World Bank, the fund’s sister organization, estimates that Third World debt will reach more than $1.2 trillion at the end of this year. Much of that was lent at interest rates that vary every day, so when rates go up, the outflow of money from the borrower country grows. For example, if a country has borrowed $50 billion at a variable rate, it has to pay out an extra $500 million a year whenever the annual rate goes up by one percentage point.