An Arab rebuff to an effort by the International Monetary Fund to borrow about $10 billion could result in the IMF having to borrow about that much money in the Eurodollar markets, high officials said yesterday.
This would necessitate a reversal of the IMF officials' policy decision made in July that the best way of adding necessary resources to the agency's lending potential was to borrow from the oil producers that enjoy massive surpluses.
The present situation arises out of a decision by both the IMF and the World Bank to bar an affiliate of the Palestine Liberation Organization from attending their joint annual meeting starting here at the end of September.
This decision must be ratified by a mail vote Tuesday by the governors of a majority of the 140 member nations, having two-thirds of the weighted votes. A senior American official said yesterday that "we are confident that we are going to win that vote."
The rebuff to the IMF came about during an eight-day trip by IMF Managing Director Jacques de Larosiere to the Persian Gulf countries that concluded on Tuesday. Larosiere was told that because of the institutions' stand on the PLO neither Saudi Arabia nor Kuwait would make any further loans at this time.
Although an IMF spokesman attempted to play down Larosiere's disappointment by saying the managing director "did not expect to get anything signed on the bottom line," in undertaking the mission Larosiere in fact had expected to get commitments he could present to the annual meeting and to the Interim Committee session right before it.
Before the PLO issue blew up, Larosiere appeared to think that he had -- if not a commitment -- a cooperative understanding from the Saudi government on the entire idea.
Neither IMF officials nor American policy makers have given up on the idea, although clearly the timing has been set back. U.S. officials said they hope that once the immediate issue of the PLO attendance at this meeting "is past us," negotiations with the Arab nations for loans might be reopened.
The status of the PLO at future annual meetings is supposed to be settled at the top level of both the bank and the IMF by March 1, assuming that the governors ratify the executive director's resolutions which effectively barred the PLO affiliate from the upcoming session by limiting participants to those who had been at last year's session at Belgrade.
At the moment, the IMF has plenty of resources, despite increasing demands for loans by member countries. But a pinch would begin to be felt in six or nine months or so, IMF sources concede. If negotiations with the Saudis and Kuwaitis (as well as the Iraqis) are still cold by then, more attention would have to be given to the possibility that the IMF would go to the money markets for the first time.