IMF Allocates $650 Billion SDR General Distribution... South Korea Receives $11.7 Billion

[Asia Economy Reporter Kim Eunbyeol] On the 23rd (local time), the International Monetary Fund (IMF) announced that it has conducted a general allocation of Special Drawing Rights (SDR) worth approximately $650 billion (456.5 billion SDR). This allocation is the fifth in history and was carried out following the IMF Spring Meeting in April this year and agreements by the Group of Twenty (G20) to overcome the COVID-19 crisis and support global liquidity.

Previously, IMF SDR allocations were only utilized during severe crises such as the two past oil shocks and the global financial crisis.

The IMF finalized the SDR allocation after a vote by the Board of Governors on July 8 and a vote by all 190 member countries on the 2nd of this month. The quorum was 85%, with 98.5% approval, and the allocation was made on the 23rd.

South Korea received 8.2 billion SDR (approximately $11.7 billion), corresponding to its quota (share, 1.80%), and the Bank of Korea and the Ministry of Economy and Finance announced that foreign exchange reserves will increase by the same amount. This corresponds to 2.55% of the foreign exchange reserves as of the end of last month ($458.6 billion).

Accordingly, South Korea's SDR holdings expanded from 2.4 billion SDR ($3.5 billion) to 10.6 billion SDR ($15.2 billion).

The IMF is preparing support measures for vulnerable countries using SDR held by advanced economies and plans to specify these through the IMF Board and the G20 in the future. The Bank of Korea and the Ministry of Economy and Finance stated, "South Korea also plans to actively participate in supporting low-income countries through consultations with the IMF and others."

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