IMF chief says “confident” to distribute new SDR by mid-August
The chief said the forthcoming allocation of SDRs was “significant” as it would provide much-needed boost to reserves for emerging markets and developing countries, especially low-income countries, whose reserves have been severely depleted in response to the pandemic.
WASHINGTON, April 14 (Xinhua) – Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva said she was “confident” that the IMF would distribute a new distribution of special drawing rights (SDRs) to member countries by mid-August.
“This is a remarkable demonstration of multilateralism that IMF membership has agreed to support a new $ 650 billion SDR allocation, the largest in IMF history,” Georgieva said in an exclusive interview with Xinhua on Tuesday.
“By comparison, in the midst of the global financial crisis, membership has allocated $ 250 billion to help countries deal with the effects of this crisis,” she said.
Georgieva said she had pledged by the end of June to make a proposal for the new allocation of SDRs to the IMF’s board of directors. Once the proposal is approved, it will be submitted to the IMF’s board of directors for a final vote.
“Given that we are all under pressure to act to get out of the crisis, I am confident that sometime in the summer, by mid-August, the new distribution will be distributed to our members,” she said.
Georgieva said the forthcoming allocation of SDRs is “significant” as it will provide much-needed boost to reserves for emerging markets and developing countries, especially low-income countries, whose reserves have been severely depleted in response to the pandemic.
In the meantime, “it sends a strong signal that we are together in this and we are building confidence to get out of the crisis,” she said.
By strengthening their reserves, countries are in a better position to set aside fiscal space to fight the pandemic, vaccinate their people and support vulnerable populations, according to Georgieva.
Georgieva added that the IMF sees the “clear value” of the SDR as an international reserve asset, as it serves membership well and replenishes reserves that accumulate in countries.
“This addition to the SDR is very valuable because it is a basket of currencies, in other words, less affected by exchange rate fluctuations,” she said.
SDRs can be exchanged between governments for freely usable currencies when needed. The Chinese currency, the renminbi, 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.