The member states of the International Monetary Fund (IMF) will on Monday, August 23, begin to receive their shares of new Special Drawing Rights totaling $650 billion, with Ukraine expected to get over $2.7 billion according to its quota, IMF Managing Director Kristalina Georgieva has said in a statement.
"The largest allocation of Special Drawing Rights (SDRs) in history – about US$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. 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," Georgieva said.
She added that SDRs are being distributed to countries in proportion to their quota shares in the IMF. This means about $275 billion is going to emerging and developing countries, of which low-income countries will receive about $21 billion – equivalent to as much as 6 percent of GDP in some cases.
At the same time, to support countries, and help ensure transparency and accountability, the IMF is providing a framework for assessing the macroeconomic implications of the new allocation, its statistical treatment and governance, and how it might affect debt sustainability.
The IMF will also provide regular updates on all SDR holdings, transactions, and trading – including a follow-up report on the use of SDRs in two years' time.
"This SDR allocation is a critical component of the IMF's broader effort to support countries through the pandemic, which includes: US$117 billion in new financing for 85 countries; debt service relief for 29 low-income countries; and policy advice and capacity development support to over 175 countries to help secure a strong and more sustainable recovery," the IMF said.