$650 billion in IMF liquidity set to help developing countries

By Tuba Sahin

ANKARA (AA) – A record allocation of IMF funds set to benefit emerging and developing countries went live on Monday, in the form of some $650 billion in special drawing rights (SDR), said the Fund's head.

The largest-ever allocation of the SDRs are “a significant shot in the arm for the world and, if used wisely, a unique opportunity to combat this unprecedented crisis," Kristalina Georgieva, the International Monetary Fund managing director, said in a statement.

In a separate Financial Times guest op-ed, Georgieva specified that she meant the COVID-19 crisis, which has wracked countries worldwide.

The allocation will provide additional liquidity to the global economic system, adding member countries’ FX reserves and reducing their reliance on more expensive domestic or external debt, her statement noted.

"Countries can use the space provided by the SDR allocation to support their economies and step up their fight against the crisis," Georgieva added.

As the SDRs are being distributed to countries in proportion to their quota shares in the IMF, some $275 billion is going to emerging and developing countries.