Fri | Sep 24, 2021

IMF OKs big increase in funds to alleviate pandemic impact

Published:Tuesday | August 3, 2021 | 4:15 PM
In this May 18, 2021, file photo, International Monetary Fund Managing Director Kristalina Georgieva speaks at the end of the Financing of African Economies Summit in Paris. The governing body of the IMF on Monday, August 2 approved a $650 billion expansion in the agency's resources to support economically vulnerable countries battling the coronavirus pandemic and the economic downturn it has caused. (Ludovic Marin, Pool via AP, File)

WASHINGTON (AP) — The governing body of the International Monetary Fund has approved a $650 billion expansion in the agency's resources to support economically vulnerable countries battling the coronavirus pandemic and the economic downturn it has caused.

The 190-nation lending institution said Monday that its board of governors approved the expansion of its reserves known as Special Drawing Rights, the largest increase in the institution's history.

“This is a historic decision ... and a shot in the arm for the global economy at a time of unprecedented crisis,” IMF Managing Director Kristalina Georgieva said.

“It will particularly help our most vulnerable countries struggling to cope with the impact of the COVID-19 crisis.”

The general allocation of SDRs will become effective on August 23.

The IMF said that the new reserves will be credited to IMF member countries in proportion to their existing quotas with the agency.

About $275 billion of the new allocation will go to the world's poorer countries.

The agency is also looking into ways richer countries could voluntarily channel SDRs to poorer countries, the agency said.

The big boost in IMF resources had been rejected by the Trump administration.

But after President Joe Biden took office in January, Treasury Secretary Janet Yellen threw her support behind the proposal.

Many Republican members of Congress objected to the SDR increase, saying that the expanded IMF resources would benefit US adversaries such as China, Russia and Iran.

However, the increase in resources was strongly supported by international relief agencies.

Follow The Gleaner on Twitter and Instagram @JamaicaGleaner and on Facebook @GleanerJamaica. Send us a message on WhatsApp at 1-876-499-0169 or email us at onlinefeedback@gleanerjm.com or editors@gleanerjm.com.