Australia gives $7b to IMF bailout fund

Australia is among the nations contributing to the International Monetary Fund's (IMF) war chest to protect against further financial deterioration in Europe.

Overnight the IMF said it had raised more than $US430 billion ($A417 billion) in an effort to assure finance markets that it has sufficient firepower to handle any new problems from Europe's prolonged debt crisis.

Treasurer Wayne Swan said Australia would contribute $A7 billion to this.

"These resources will increase the lending capacity of the IMF and enable it to play its systemic role for the benefit of all members," he said in a statement from Washington DC.

Other countries contributing to the fund include Singapore ($4 billion), South Korea ($15 billion) and the United Kingdom ($15 billion).