WASHINGTON – International Monetary Fund (IMF) managing director Kristalina Georgieva today said the institution’s executive board has backed increasing its special drawing rights (SDRs) by US$650 billion (RM2.7 trillion) as it looks to support countries recovering from the Covid-19 crisis.
The increase is the biggest-ever for SDRs, which are international reserve assets that aid governments in protecting their financial reserves against global currency fluctuations, and also help IMF calculate loans and interest rates.
“The IMF executive board yesterday concurred with my proposal for a new general SDR allocation equivalent to US$650 billion – the largest allocation in IMF’s history – to address the long-term global needs for reserves during the worst crisis since the Great Depression,” said Georgieva in a statement.
“This is a shot in the arm for the world. The SDR allocation will boost the liquidity and reserves of all our member countries, build confidence, and foster the resilience and stability of the global economy.”
If approved by the Washington-based crisis lender’s board of governors, the new allocation will be completed by end-August, she said.
It “will help every IMF member country – particularly vulnerable countries – and strengthen their response to the Covid-19 crisis”.
G20 finance ministers from the world’s richest nations are meeting today and tomorrow, and are expected to mainly discuss a global proposal to tax multinationals more fairly.
Georgieva has called on the group to step up efforts to help the poorest countries withstand the “devastating double blow” of the pandemic and resulting economic damage. – AFP, July 9, 2021
