Something I Learned today
Kristalina Georgieva, Managing Director of the International Monetary Fund, announces the entry into force of the general distribution of the new $650 billion Special Drawing Rights (SDR) allocations.
August 23, 2021
Washington, DC: Today, Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund, made the following statement:
Today, the largest allocation of SDR allocations in the fund’s history takes effect – worth about $650 billion. These allocations represent a vaccine injection in the arm of the world, and if used wisely, it will be a unique opportunity to combat this unprecedented crisis.
“This distribution will provide additional liquidity to the global economic system – an element that complements countries’ foreign exchange reserves and reduces their dependence on more expensive domestic or external debt. Countries can use the spending space provided by the SDR allocation to support their economies and intensify their response to the crisis.
“SDR allocations are distributed to member countries in proportion to each country’s share of the IMF’s membership quotas. This means that emerging and developing countries will receive about $275 billion, of which about $21 billion will go to low-income countries—a proportion of up to 6 billion dollars. % of GDP in some cases.
“The SDR is a very valuable resource, and determining how best to use it depends on what the member countries decide in this regard. In order for the SDR to be used to the maximum benefit of the member countries and the global economy, these decisions should be wise and based on sufficient information.
“To support member countries and help ensure transparency and accountability, the Fund provides a framework for assessing the macroeconomic implications of new allocations, how they are statistically treated and governed, and their potential impact on debt sustainability. The Fund will also provide regular updates of data on all relevant holdings, transactions, and trade-offs. Relevancy to SDRs – including a follow-up report on the use of SDRs over a two-year period.
“To maximize the benefits of this distribution, the Fund encourages countries with strong external positions to volunteer to transfer some of the SDRs to countries in greatest need. Some countries have already pledged to lend $24 billion, of which $15 billion is from their current SDR allocation, to The Poverty Reduction and Growth Trust provides soft loans to low-income countries. This is just the beginning, and the Fund will continue to work with its member countries to build on this effort.
The Fund is also communicating with its member countries about the possibility of establishing a new trust fund called the Trust Fund for Sustainability and Resilience, through which SDRs transferred from member countries could be used to help poor and vulnerable countries undergoing structural transformation, including addressing climate-related challenges. The SDR could also be channeled for purposes of supporting lending from the multilateral development banks.
“This SDR allocation is a critical component of the Fund’s broader effort to support its member countries to weather the pandemic, which includes $117 billion in new financing for eighty-five countries; debt relief for twenty-nine low-income countries; and policy advice and support in capacity development for one hundred and seventy-five countries to help them
achieve a strong and more sustainable recovery
it increase the international reserves
in the central bank ,one of good factors of the strength of the economy
we do have made a positive things today what about the others
All My Best wishes for you, and Also You wish the best for me and for every one