The world’s richest countries are edging towards a consensus on unlocking additional IMF funds for poorer nations whose economies have been battered by the coronavirus crisis, according to a leading G20 official.
Mohammed al-Jadaan, the finance minister of Saudi Arabia, which holds the G20 presidency this year, told the Financial Times that he was “optimistic” that the group of nations and the IMF could agree on a new allocation of the fund’s special drawing rights — or SDRs — “soon”.
SDRs are an international reserve asset allocated to IMF members in proportion to their share of the global economy; they can be used to provide cash injections to countries with diminishing foreign exchange reserves.
During the 2008 financial crisis the IMF issued $270bn in SDRs in a bid to help boost countries’ financial resilience. The question of whether it should make a similar move in response to the economic consequences of the pandemic has been a hotly-debated topic as the coronavirus outbreak and global recession have hit low-income countries, which are struggling with high debts and plummeting revenues.
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