IMF Sees Approval of $650 Billion in Reserves by End of August
(Bloomberg) -- International Monetary Fund Managing Director Kristalina Georgieva expects approval for $650 billion in new reserve assets by the board of governors by the end of August, boosting resources for nations dealing with the global pandemic.
The IMF is also working on ways to improve transparency of how the assets, called special drawing rights, or SDRs, are used, and how wealthy countries who don’t need the assets can pass them on to nations that do, Georgieva said Friday in an interview with Bloomberg Television’s David Westin.
Georgieva noted that the IMF already has boosted its available lending for poor countries via the interest-free Poverty Reduction and Growth Trust by almost $20 billion. The trust has grown through loans and donations of SDRs by rich countries including Japan and European Union nations.
“I’m optimistic that with the new injection of SDRs we will have a big additional boost in concessional lending to developing countries,” Georgieva said. In terms of rich nations re-allocating SDRs to poor countries, “many have already announced that they intend to do it -- both advanced economies and some emerging-market economies like China,” she said.
IMF staff are preparing the details of the proposal to boost SDRs after the idea received broad support from its executive board in March. Georgieva previously said that she hoped to present the formal proposal in June. Treasury Department officials from the U.S., the IMF’s largest shareholder, previously projected that central banks could receive the assets in August.
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