IMF’s $650b SDR Allocation Takes Effect

The International Monetary Fund said its new allocation of Special Drawing Rights (SDRs) equivalent to $650 billion, the largest in the IMF's history, comes into effect, in an effort to help countries recover from the Covid-19 pandemic.

"The allocation is a significant shot in the arm for the world and, if used wisely, a unique opportunity to combat this unprecedented crisis," IMF Managing Director Kristalina Georgieva said in a statement on Monday, Xinhua reported.

"The SDR allocation will provide additional liquidity to the global economic system -- supplementing countries' foreign exchange reserves," Georgieva said.

SDRs are being distributed to countries in proportion to their quota shares in the IMF. About $275b of the allocation will go to emerging and developing countries, of which low-income countries will receive about $21b.

The announcement came weeks after the board of governors of the IMF on Aug. 2 finally approved the SDR allocation proposal, which was delayed for more than a year.