The executive board of the International Monetary Fund has approved a $650 billion expansion in reserve funds to help economically vulnerable nations battle the coronavirus pandemic.
“The IMF Executive Board yesterday concurred in my proposal for a new general SDR allocation equivalent to US$650 billion – the largest allocation in the IMF’s history – to address the long-term global needs for reserves during the worst crisis since the Great Depression. I will now present the new SDR allocation proposal to the IMF’s Board of Governors for their consideration and approval,” International Monetary Fund Managing Director Kristalina Georgieva said.
If the Board of Governors gives the green light, the allocation of funds is expected to be completed by the end of August. Notably, the highest decision-making body of the IMF consists of representatives of the fund’s member countries. This project is highly likely to be endorsed as Georgieva's statement highlights the urgent need to scale up measures aimed at fighting the pandemic.
“We will maintain active engagement with our membership in the months ahead to identify viable options for voluntary channeling of SDRs from wealthier members to support our poorer and more vulnerable countries to help their pandemic recovery and achieve resilient and sustainable growth, which will also help boost global economic recovery,” Kristalina Georgieva noted.
