The International Monetary Fund (IMF) announced on Aug. 23 that $650 billion worth of emergency reserve funds will be distributed among its member countries to help them recover from the COVID-19 pandemic.
Managing Director of the IMF Kristalina Georgieva said that the allocation of Special Drawing Rights (SDR) is a “significant shot in the arm for the world.”
“The SDR allocation will provide additional liquidity to the global economic system — supplementing countries’ foreign exchange reserves and reducing their reliance on more expensive domestic or external debt,” Georgieva explained.
All of the IMF’s member countries will receive a share of the additional SDR allocation, which is the largest in history, in proportion to their “quota shares” in the IMF.
Georgieva said that out of the additional $456 billion worth of SDRs, about $275 billion will go to developing and low-income countries.
The United States, Japan, China, and Germany are among the top receivers of the SDR allocation.
Georgieva also encouraged wealthier nations to extend support to countries in need to “magnify the benefits” of the allocation.
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