G7 Finance Ministers Agree on IMF Special Drawing Rights New Allocation to Support Low-Income Countries

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The finance ministers of the Group of Seven (G7) have agreed to expand the funding capacity of the International Monetary Fund (IMF) to support low-income countries facing crises due to the COVID-19 pandemic.

The United Kingdom, the chair country of the G7 meeting, announced on the 19th (local time) in a statement released after a virtual meeting of finance ministers that they agreed to support a plan to allocate a substantial new issuance of IMF Special Drawing Rights (SDRs).

SDRs are rights to draw liquidity from the IMF. Member countries receive SDR allocations according to their contribution quotas. There has been no new SDR allocation since the global financial crisis in 2009.

Sources within the United States reported that a plan to increase the SDR amount to $500 billion (565 trillion won) through new allocations is being discussed.

The new SDR allocation must pass through the G20 and the International Monetary and Financial Committee (IMFC) meetings held at the IMF and World Bank spring meetings next month.

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