The Managing Director of the International Monetary Fund (IMF), Ms Kristalina Georgieva, has said that the organisation has begun allocating Special Drawing Rights of about $650 billion.
This was contained in a press statement on the IMF website.
She was quoted in the statement, as saying, “The largest allocation of Special Drawing Rights in history – about $650 billion – comes into effect today.
“The allocation is a significant shot in the arm for the world and, if used wisely, a unique opportunity to combat this unprecedented crisis.”
She added that the allocation would provide extra liquidity to the global economy.
Georgieva was quoted as saying, “The SDR allocation will provide additional liquidity to the global economic system – supplementing countries’ foreign exchange reserves and reducing their reliance on more expensive domestic or external debt.
“Countries can use the space provided by the SDR allocation to support their economies and step up their fight against the crisis.”
She further said that the allocation would be made to countries based on their quota shares in the IMF.
“SDRs are being distributed to countries in proportion to their quota shares in the IMF. This means about $275bn is going to emerging and developing countries, of which low-income countries will receive about $21bn – equivalent to as much as six per cent of GDP in some cases,” she said.
Nigeria has 2,352.5m SDR shares, which translates to about $3.35 billion.
Georgieva also stated that IMF planned to engage member countries in establishing a new Resilience and Sustainability Trust.
According to her, “The IMF is also engaging with its member countries on the possibility of a new Resilience and Sustainability Trust, which could use channeled SDRs to help the most vulnerable countries with structural transformation, including confronting climate-related challenges”.
She added, “Another possibility could be to channel SDRs to support lending by multilateral development banks.