The managing director of the International Monetary Fund said this week that the new Special Drawing Rights (SDR) allocation of $650 billion should reach countries by mid-August.
“After the G20 announcement, the confidence signal is sent, prudent execution is missing, we need to send a report to the board, then take the vote.
We have to have internal measures put in place for the allocation to be a reality, and given the example of 2009, history shows that it takes three or four months, so the mid-August deadline is tight, but it is realistic,” Kristalina Georgieva said.
Speaking during a press conference held this afternoon from Washington, the IMF headquarters, as part of the Spring Meetings, organised jointly with the World Bank, the Fund leader said that the official G20 communiqué, released this afternoon, showed strong support for this “capital increase” that will be distributed among all Fund members according to their quota.
“The expectation of increased reserves is being built as a confidence-building measure, after the G20 meeting we need 85 per cent of the votes ‘to approve the allocation of DES, the IMF currency’,” Georgieva said, showing herself convinced that support will not be lacking.
In addition to the official approval by the G20 of the proposal to issue SDRs, “the representatives from outside the G20 who attended the meeting were even more vocal in their support for the initiative, especially the representatives from Africa,” she concluded.
Asked about the possible modalities for transferring the funds that the richest countries will receive, the IMF director was more cautious and said that “it is premature to make projections about the scale” of this transfer, whose aim is to boost the financial arsenal of the weakest countries to better fight the pandemic and revive their economies.
