As the COVID-19 crisis continues to exacerbate restrictions on authorities spending throughout the world, the UN main connected Tuesday welcomed the determination by the International Monetary Fund (IMF) to o.k. a $650 cardinal allocation of Special Drawing Rights to “boost liquidity”.
Secretary-General António Guterres issued a statement on the argumentation alteration towards Special Drawing Rights or SDRs, a benignant of overseas reserve asset that are IMF defined and maintained, as additional backing that could help to wage down debts.
He besides underscored that economies not in request of access to cash should “consider channeling these resources to susceptible debased and middle-income countries that request a liquidity injection by replenishing the IMF’s Poverty Reduction and Growth Trust Fund”.
We tin bash adjacent much to assistance susceptible countries hard deed by this crisis.
I americium moving intimately with our members to find ways for countries successful a stronger presumption to voluntarily transmission Special Drawing Rights (SDRs) to countries astir successful need. Together, we tin bash this! pic.twitter.com/G3KFUDPLV6
‘Historic decision’
Yesterday’s IMF’s allocation makes caller borrowing disposable to the fund’s 190 subordinate countries, roughly successful proportionality to their stock of the planetary economy.
“This is simply a historical decision – the largest SDR allocation successful the past of the IMF and a changeable successful the limb for the planetary system astatine a clip of unprecedented crisis”, said IMF Managing Director Kristalina Georgieva.
“The SDR allocation volition payment each members, code the semipermanent planetary request for reserves, physique confidence, and foster the resilience and stableness of the global economy. It volition peculiarly assistance our astir susceptible countries struggling to header with the interaction of the COVID-19 crisis.”
Halting indebtedness default
The Secretary-General stressed that it is also “critical to rapidly found the projected Resilience and Sustainability Trust astatine the IMF…[for] a broad effect and recovery, including providing much enactment for vaccinations and indebtedness absorption and to enactment the efforts of processing economies successful restructuring for inclusive growth”.
Last month, he urged the world’s largest economies to spearhead a planetary COVID-19 vaccination plan and expand indebtedness alleviation to processing countries battered by the pandemic.
Bulwark against default
He besides advised supporting a caller $50 billion IMF investment roadmap aimed at ending the pandemic and driving a accelerated recovery.
As galore processing countries are “teetering connected the verge of indebtedness default”, the UN chief encouraged the G20 leading industrialized nations to transmission unused SDRs to the Fund’s caller resilience and sustainability plan, for these nations.
“Special Drawing Rights besides request to beryllium considered arsenic further funding, not deducted from Official Development Assistance”, he reminded.
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