International Monetary Fund executive director Ms. Kristalina Georgieva said the organization began awarding special drawing rights of approximately $ 650 billion on Monday.
That was included in a press release on the IMF website on Monday.
She was quoted in the statement as saying, “The largest special drawing rights grant in history – about $ 650 billion – comes into effect today.
“The allotment is a significant shot in the arm for the world and, if used carefully, a unique opportunity to address this unprecedented crisis.”
She added that the allocation of the global economy would provide additional liquidity.
Georgieva was quoted as saying, “The SDR allocation will add liquidity to the global economic system – supplementing countries’ foreign exchange reserves and reducing their reliance on more expensive domestic or foreign debt.
“Countries can use the space provided by the SDR allocation to support their economies and step up their fight against the crisis.”
She went on to say that the allocation to countries would be based on their quota shares in the IMF.
“SDRs are distributed to the countries in proportion to their quota shares in the IMF. That means about $ 275 billion goes to emerging and developing countries, of which low-income countries receive about $ 21 billion – in some cases up to six percent of GDP, “she said.
Nigeria owns 2,352.5 million SDR shares, which equates to approximately $ 3.35 billion.
She also stated that the IMF intends to involve member countries in establishing a new resilience and sustainability trust.
Georgieva said: “The IMF is also working with its member countries on the possibility of a new resilience and sustainability trust that could use channeled SDRs to help the most vulnerable countries with structural change, including addressing climate-related challenges.
She added: “Another option could be to channel SDRs to support lending by multilateral development banks.
“This SDR allocation is a critical part of the IMF’s broader effort to assist countries during the pandemic, which includes: US $ 117 billion in new funding for 85 countries; Debt service relief for 29 low-income countries; and policy advice and capacity building support for over 175 countries to ensure a strong and more sustainable recovery. “
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