The board of governors of the International Monetary Fund (IMF) has approved a general allocation of Special Drawing Rights (SDRs) equivalent to US $650 billion (about SDR 456 billion) to boost global liquidity.
IMF Managing Director Kristalina Georgieva termed it a “historic” decision, the largest SDR allocation in the history of the IMF and a shot in the arm for the global economy at a time of unprecedented crisis, said a statement issued on Tuesday.
She said 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,” she added.
The general allocation of SDRs will become effective on August 23, 2021. The newly created SDRs will be credited to IMF member countries in proportion to their existing quotas in the Fund.
About $275 billion of the new allocation will go to emerging markets and developing countries, including low-income countries.
Pakistan is expected to get $2.8 billion from the IMF under the new allocation of special drawing rights for frontier markets.
This will bolster the State Bank of Pakistan’s foreign exchange reserves to US $20.6bn, the highest in Pakistan’s history.
“We will also continue to engage actively with our membership to identify viable options for voluntary channeling of SDRs from wealthier to poorer and more vulnerable member countries to support their pandemic recovery and achieve resilient and sustainable growth”, Georgieva said.—TLTP