Prague - Czech ministers voted on Monday to provide a EUR 1.03 billion loan to the International Monetary Fund, which will in turn lend the money to countries struggling with the economic downturn.

EU member states agreed in March to jointly increase the IMF budget by EUR 75 billion after the global financial crisis badly impaired the cash flow of some central governments.

"Some EU countries have applied for financial aid from the IMF, while other member states will participate in the aid by lending money to the IMF," said Czech Finance Minister Miroslav Kalousek.

"The Czech Republic belongs to the second group and is one of the few countries in central and eastern Europe that can afford to release the funding for the IMF."

The Czech Finance Ministry asked the Czech National Bank (ČNB) to release the sum from its foreign currency reserves.

"For the Czechs, this way of funding the [IMF] loan is efficient and cheaper than if we went [to raise] the money on the market," said Kalousek. "Besides, a direct loan from ČNB reserves will not increase the country's foreign debt."