Source: reuters.com

The staff of the International Monetary Fund has recommended an expansion of the Fund’s emergency reserves by $650 billion, given higher financing needs of its members in the wake of the global pandemic.

The IMF’s executive board will discuss the recommendation for a new allocation of $650 billion of the IMF’s Special Drawing Rights. It would be the first expansion of the IMF’s reserves since a $250 billion allocation approved in 2009, during the global financial crisis.

If approved, the additional reserves – which can be turned into hard currencies by members or shared with needier countries – should be available later this year.

An assessment of global reserve needs, completed every five years, showed a clear need for additional SDRs as countries continue to grapple with the coronavirus pandemic.