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August 4, 2021

Anna Murray 

The IMF's Board of Governors approved a general allocation of Special Drawing Rights (SDRs) equivalent to US$650 billion (approximately SDR 456 billion) on August 2 to increase global liquidity as the COVID-19 crisis exacerbates restrictions on government spending around the world. Soon after, on August 3, Secretary-General António Guterres welcomed the International Monetary Fund's (IMF) decision to approve a US$650 billion SDR allocation to help boost global liquidity.

On August 23, the general allocation of SDRs will take effect. SDRs will be credited to 190 IMF member countries in proportion to their current Fund quotas. Furthermore, the new allocation of US$275 billion will go to emerging markets and developing countries, including low-income countries (about SDR 193 billion).

As many developing countries are on the verge of debt default, the UN Secretary-General emphasized that economies that do not require cash should consider channeling these resources to vulnerable low and middle-income countries in need of liquidity by replenishing the IMF's Poverty Reduction and Growth Trust Fund.

According to IMF Managing Director Kristalina Georgieva, this is a historic decision on the largest SDR allocation in the IMF's history, as well as a shot in the arm for the global economy in the midst of an unprecedented crisis. Georgieva urged the organization to continue examining the most viable options for the voluntary channeling of SDRs from the richest member countries to the poorest and most vulnerable member countries in order to support their economic recovery and achieve resilient and sustainable growth.