“This is a historic decision – the largest distribution of SDRs in the history of the IMF and a shot in the arm for the world economy in a time of unprecedented crisis,” said IMF Managing Director Kristalina Georgieva.
WASHINGTON, Aug 2 (Xinhua) – The International Monetary Fund (IMF) Board of Governors has approved a new total allocation of special drawing rights (SDRs) equivalent to $ 650 billion, the largest allocation in IMF history. an attempt to increase global liquidity amid the COVID-19 pandemic, according to an IMF statement issued Monday.
“This is a historic decision – the largest distribution of SDRs in the history of the IMF and a shot in the arm for the world economy in a time of unprecedented crisis,” said IMF Managing Director Kristalina Georgieva.
Noting that the allocation of SDRs will benefit all IMF members, meet the long-term global need for reserves, build confidence and promote the resilience and stability of the global economy, Georgieva said it would help the most vulnerable in particular. countries struggling to cope with the impact of the COVID-19 crisis.
The approval came just weeks after the IMF’s executive board approved the proposal. The final approval of the SDR allocation by the Board of Governors requires an 85% majority of the total voting rights of all IMF members.
SDRs can be exchanged between governments for freely usable currencies at times of need. The Chinese currency, the yuan, officially became the fifth currency in the SDR basket on October 1, 2016, joining the US dollar, the euro, the Japanese yen and the British pound.
The total distribution of SDRs will take effect on August 23, the statement said.
Georgieva said the IMF would also continue to actively engage in its membership to identify “viable” opportunities to voluntarily target SDRs from richer to poorer and more vulnerable member states to support their recovery from a pandemic. and to achieve sustainable and sustainable growth.
One key opportunity is for members with strong external positions to voluntarily direct part of their SDRs to increase lending to low-income countries through the IMF Poverty Reduction and Growth Trust (PRGT), the statement said. adds that preferential support through PRGT is currently interest-free.
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