March 24, 2011 / 8:48 PM / 9 years ago

IMF chief to activate crisis fund - sources

WASHINGTON, March 24 (Reuters) - The head of the International Monetary Fund will seek approval from member countries next week to activate a $580 billion crisis fund, a confidence building move at a time of heightened global uncertainty, sources said.

“The managing director is going to activate the NAB (New Arrangements to Borrow),” said one source briefed on the developments.

Sources emphasized that Portugal had not requested IMF bailout money but the sudden departure of its prime minister made it likely that the country could not avoid turning to the European Union and IMF for financial assistance.

“The biggest worry is the high risk of contagion from Portugal and general global uncertainty will trigger a new wave of borrowing from the fund ,” another source said, adding that Spain held one-third of Portugal public debt.

Reporting by Lesley Wroughton

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