WASHINGTON – International Monetary Fund (IMF) Managing Director Kristalina Georgieva said in a statement that she supports discussions about a possible new Special Drawing Rights allocation of US$650 billion (AS$1=RM4.12) to support the global recovery from the COVID-19 pandemic.
“To this end, Executive Directors conveyed broad support among Fund members for IMF staff to formulate a proposal for a new SDR allocation equivalent to US$650 billion to provide additional liquidity to the global economic system by supplementing the reserve assets of the Fund’s 190 member countries.
“I intend to present by June a formal proposal to the Executive Board to consider a new allocation of US$650 billion, based on an assessment of IMF member countries’ long-term global reserve needs, and consistent with the Articles of Agreement and the IMF’s mandate,” Georgieva said on March 23.
The funding could also be used to support vaccination programmes, Georgieva said.
Under the IMF’s Articles of Agreement, the Managing Director may make a proposal of an SDR allocation if the Managing Director is satisfied that the allocation would help meet a long-term global need to supplement existing reserve assets in a manner that will avoid stagnation and deflation as well as excess demand and inflation, and there is broad support among IMF members for the allocation.
Once the Managing Director’s proposal is concurred in by the Executive Board, it would be submitted to the Board of Governors whose decision approving an SDR allocation would require support by members representing 85 percent majority of the total voting power.
SDR allocations are distributed across the IMF membership in proportion to IMF quota shares.
The pandemic has now seen more than 124 million confirmed cases of COVID-19 worldwide, along with over 2.7 million related deaths, according to Johns Hopkins University data as of Tuesday evening.