The IMF’s $650 billion Special Drawing Rights allocation is a historic decision that’s seen as ‘a shot in the arm for the global economy’ at a time of unprecedented crisis, Fund spokesman Gerry Rice said in a press briefing in Washington, DC Thursday, (Sept. 16th.)
The SDR allocation will benefit all IMF members and address the long-term global need for reserves, build confidence, and foster the resilience and stability of the global economy, said Rice. The IMF would like to see as much as possible of the allocation going from the wealthier to the most vulnerable countries to help them achieve more sustainable recoveries from the pandemic.
“This was our largest the IMF's largest SDR allocation in our history, 650 billion dollars. And it's effective. The SDR allocation was made on August 23. As I said, it's an important boost to all our member countries at this time when we're struggling with probably the biggest crisis of all of our lifetimes. And we think it can be a great help in that effort. like to see as much as possible of the allocation going to the most vulnerable countries. So, we call this the channeling of SDRs. So, the SDRs have been allocated and now we are pushing for we're advocating that the wealthier countries who may have excess SDRs, that they would allocate those SDRs or some of them to the more vulnerable countries. So Kristalina Georgieva has been very public about that and about pushing for that,” said Gerry Rice, Director of the Communications Department, IMF.
About US$275 billion of the new allocation will go to emerging markets and developing countries, including low-income countries.
On Afghanistan, Rice expressed the IMF’s deep concern with the difficult economic and humanitarian situation there. He also stressed that the immediate focus now should be on that humanitarian situation, aid to help the Afghan people, and allowing the flow of remittances and small-scale transfers and providing assistance to countries hosting Afghan refugees.
“Our engagement with Afghanistan has been suspended until there is clarity within the international community on the recognition of the government. We're guided by the international community in terms of the recognition of the government in Afghanistan, and we don't have that. So, the IMF program there, which you asked about, has been put on hold. And again, as we said last month, the country cannot access IMF resources, SDRs and so on at this point. But again, I want to say that we stand ready to work with the international community to advocate for urgent actions to stall a looming humanitarian crisis,” said Rice.
Rice also announced that a virtual review mission is planned to take place in September for Ukraine. The specific dates will be announced closer to the start of the mission.
“A virtual review mission is planned for Ukraine to take place later this month. The specific dates will be announced, as usual, closer to the start of the mission. But later this month, the month of September. And, you know, just in terms of the status where we are with Ukraine, we did say earlier in the summer that we will be working with the authorities on remaining issues where agreements needed for us to be able to complete the review of the ongoing program with Ukraine. And again, there's going to be a mission where these things will be discussed. But we've been focusing, as I've said here before, on issues related to strengthening the governance and autonomy of the National Bank of Ukraine, judicial reform, restoring and strengthening the anti-corruption framework, and as well as, you know, the fiscal position, ensuring a sustainable fiscal position and so on and so on,” said Rice.
To watch the full press briefing, click here.