With an unprecedented financial injection, the IMF wants to help developing and emerging countries overcome the Corona crisis – a “historic decision” according to IMF boss Kristalina Georgiewa.
The supreme body of the International Monetary Fund (IMF) has approved an unprecedented increase in the organisation’s financial clout by US $ 650 billion. “This is a historic decision,” said IMF boss Kristalina Georgieva in Washington. The IMF wants to use the financial injection to provide developing and emerging countries with additional liquidity to overcome the Corona crisis – without increasing their debt.
It is not a capital increase in the true sense of the word. The IMF has its own reserve currency called Special Drawing Rights (SDR). The amount of these rights is now to be increased by $ 650 billion (around 548 billion euros) – the whole thing should come into force on August 23. It is the largest SDR allocation in the history of the IMF, said Georgieva. “It will especially help our weakest countries that are struggling with the effects of the Covid 19 crisis.” Around 275 billion US dollars are to go to emerging and developing countries.
At a Corona aid summit for Africa in Paris in May, French President Emmanuel Macron campaigned for the richest countries to redistribute their special drawing rights to the poorest countries, especially in Africa. The use of the SDR is interesting, for example, for countries that are stuck in balance of payments crises or that could only get into debt on the international capital market at very high costs. The IMF first used the SDR on a large scale after the 2008/2009 financial crisis.
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
