IMF Considers Up to $650 Billion SDR to Support Developing Countries' COVID-19 Response

[Image source= AFP Yonhap News]

[Asia Economy Reporter Park Byung-hee] The International Monetary Fund (IMF) is reportedly considering a plan to raise $650 billion through Special Drawing Rights (SDR) to support developing countries' response to COVID-19, Bloomberg reported on the 23rd (local time).

According to sources, the IMF Executive Board discussed the $650 billion funding plan today and is expected to make a final decision next month. The main focus is the size of the special fund, with $650 billion being discussed, which is more than the previously considered $500 billion.

Since President Joe Biden took office, the United States has shifted to support the issuance of SDRs, advancing discussions on securing the funds.

Former U.S. President Donald Trump opposed the issuance of SDRs, expressing dissatisfaction with the IMF contribution quota. With the U.S. now in favor, the originally planned $500 billion fund has expanded to up to $650 billion.

The U.S. government is reportedly able to provide up to $650 billion without congressional approval, considering the current exchange rates.

Opposition voices have emerged from the U.S. Republican Party. Republican Representative French Hill argued that SDR issuance should be opposed because it would benefit wealthy countries committing wrongdoing, such as China, Russia, and Iran.

SDRs are an international currency created by the IMF and are used only within the public sector, including the IMF, member countries, and international organizations. Countries holding SDRs can exchange them for other member countries' currencies such as dollars or euros in case of a balance of payments deficit.

This content was produced with the assistance of AI translation services.