The International Monetary Fund has approved the allocation of Special Drawing Rights of up to US$650 billion to boost global liquidity.
This is to help create fresh opportunities for member countries with liquidity challenges to access IMF facilities, strengthen their economies and enable them to fight the re-surging COVID-19.
According to a statement from IMF Managing Director, Kristalina Georgieva, she described the SDRs as the largest allocation in the history of the organisation.
The general allocation of SDRs would become effective on August 23, 2021. The newly created SDRs would be credited to IMF member countries in proportion to their existing quotas in the Fund. About $275 billion of the new allocations will go to emerging markets and developing countries, including low-income countries.
The financial organisation promised to continue engaging actively with members to identify viable options for voluntary channelling of SDRs from wealthier to poorer and more vulnerable member countries to support their pandemic recovery and achieve resilient and sustainable growth.
Concessional support through the PRGT is currently interest-free. The IMF said it was also exploring other options to help poorer and more vulnerable countries in their recovery efforts through a possible new Resilience and Sustainability Trust.
In April 2020, Nigeria collected $3.4 billion, equivalent to 100 per cent of its quota under the IMF’s Rapid Financing Instrument to tackle funding gaps created by COVID-19.