Introduction: IMF allocates $650bn to help pandemic-hit economies
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Overnight, the board of governors of the International Monetary Fund (IMF) approved the largest resource injection in its history to boost global liquidity and help countries which are struggling as a result of the pandemic.
The reserve assets – known as “special drawing rights” – total $650bn (£468bn) and become available on 23 August when they will be credited to IMF member countries.
The lion’s share – around 70% – of the allocation will go to the world’s 20 largest economies (the G20), although around $275bn is destined for emerging markets and developing countries, including low-income countries.
The IMF’s managing director Kristalina Georgieva hailed a “historic decision” and a “shot in the arm for the global economy at a time of unprecedented crisis”.
The SDR allocation will benefit all members, address the long-term global need for reserves, build confidence, and foster the resilience and stability of the global economy.
It will particularly help our most vulnerable countries struggling to cope with the impact of the COVID-19 crisis.
The IMF’s plan was delayed last year when the IMF’s largest shareholder the United States – led at the time by President Trump – blocked it, saying the money wouldn’t reach countries that need it. But the US’s position changed under President Biden.