In a bid to strengthen global liquidity amid the COVID-19 pandemic, the Board of Governors of the International Monetary Fund (IMF) has approved a new general allocation of Special Drawing Rights (SDR) equivalent to 650 billion US dollars -- the largest allocation in the IMF's history. The SDR allocation will benefit all members, address the long-term global need for reserves, build confidence, and foster the resilience and stability of the global economy.

The  IMF Managing Director Kristalina Georgieva in a statement said,  “This is a historic decision – the largest SDR allocation in the history of the IMF and a shot in the arm for the global economy at a time of unprecedented crisis," adding that It will particularly help our most vulnerable countries struggling to cope with the impact of the COVID-19 crisis.”

About USD275 billion (about SDR 193 billion) of the new allocation will go to emerging markets and developing countries, including low-income countries. The general allocation of SDRs will become effective on August 23, 2021. The newly created SDRs will be credited to IMF member countries in proportion to their existing quotas in the Fund.  The approval came weeks after the International Monetary Fund executive board approved the proposal. Final approval of the SDR allocation by the Board of Governors requires an 85-per cent majority of the total voting power of all IMF members.

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