Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, said Monday that the allocation of Special Drawing Rights (SDRs), which amount to $650 billion, will come into effect today.
“The largest allocation of Special Drawing Rights (SDRs) in history about $650 billion comes into effect today. The allocation is a significant shot in the arm for the world and, if used wisely, a unique opportunity to combat this unprecedented crisis,” Georgieva said in Monday in an IMF statement.
“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. Countries can use the space provided by the SDR allocation to support their economies and step up their fight against the crisis,” Georgieva added.
“SDRs are being distributed to countries in proportion to their quota shares in the IMF. This means about $275 billion is going to emerging and developing countries, of which low-income countries will receive about $21 billion – equivalent to as much as 6 per cent of GDP in some cases,” she explained.
“SDRs are a precious resource and the decision on how best to use them rests with our member countries,” she noted, pointing out that “For SDRs to be deployed for the maximum benefit of member countries and the global economy, those decisions should be prudent and well-informed.”
Source: Jordan News Agency