The Washington-based executive board approved the banks’ permit application on February 8. In addition to owning and acquiring the reserves, the prescribed holders can use them in transactions by arrangement and in operations, the agency said.
The Fund’s policy with SDRs
In 2021, the IMF created a record $650 billion in SDR to deal with the consequences of the pandemic. IMF Managing Director Kristalina Georgieva has urged rich nations to redirect part of their allocation of SDRs to countries most in need and has promoted the idea of channeling their support through multilateral development banks, although this has not been done so far.
South African President Cyril Ramaphosa has called on rich nations to donate, not just lend, their allocations.
He African Development Bank He said in June last year that he is lobbying rich nations to use their rights to the IMF’s reserve assets to help him raise funds to support poorer countries, the first initiative of its kind by a multilateral bank.
He Inter-American Development Bankwhich serves Latin America, is now working with the AfDB on a proposal to rechannel the SDRand have consulted the IMF on technical aspects, a spokesman for the fund said on Tuesday.
Under the mechanism, taxpayers would use their holdings of SDR to acquire a hybrid capital instrument that the multilateral development bank could count as equity, according to the spokesperson.
Source: Ambito
