Washington DC (USA) June 26: The International Monetary Fund (IMF) is expected to complete the process of a new allocation of Special Drawing Rights (SDR) by the end of August, IMF spokesman Gerry Rice said on Friday.
The IMF executive board on Friday discussed a proposal for a new SDR allocation of 650 billion U.S. dollars, "the largest issuance in the IMF's history" aimed at helping its membership, especially the most vulnerable, overcome the COVID-19 crisis, Rice said in a statement at the end of the board meeting.
"The Board discussion is another step in the process toward a new SDR allocation which we expect to be completed by the end of August," Rice said.
During an interview with Xinhua in April, IMF Managing Director Kristalina Georgieva said the upcoming SDR allocation is "significant" as it will provide much-needed reserves boost to emerging markets and developing countries, especially low-income countries, whose reserves have been severely depleted in response to the pandemic.
Meanwhile, "it sends a powerful signal that we are in this together and building confidence for the exit from the crisis," she said.
By strengthening their reserves, countries are in a better position to allocate fiscal space to fight the pandemic, vaccinate their people and support vulnerable parts of the population, according to Georgieva.
The SDR can be exchanged among governments for freely usable currencies in times of need. The Chinese currency, renminbi, formally became the fifth currency in the SDR basket on Oct. 1, 2016, joining the U.S. dollar, the euro, the Japanese yen and the British pound.
Source: Xinhua