FINANCE & PUBLIC SERVICE
Caribbean member countries of the International Monetary Fund (IMF) could benefit from as much as US$2.4 billion in additional liquidity support, under the entity’s newly proposed US$650-billion Special Drawing Rights (SDR) allocation.
The overall provision is intended to aid in the global recovery from the economic fallout resulting from the coronavirus (COVID-19) pandemic, by supplementing the reserve assets of the IMF’s 190-member countries.
Acting Director of the IMF’s Western Hemisphere Department, Nigel Chalk said the proposal is expected to be discussed by the Fund’s Executive Board on June 25.
He indicated that once approved, it will be relayed to the Board of Governors for ratification.
Mr. Chalk said that if the submission secures 85 per cent of the members’ votes, “this allocation becomes effective by the end of August”.
Mr. Chalk explained that allocations under the proposed SDR the provision would be distributed according to each IMF member country’s quota share, noting that in the Caribbean’s case, “this would equate to approximately US$2 .4 billion”.
“Members with liquidity constraints will be able to use this allocation to smooth the needed adjustment and avoid distortionary policies, and it would provide scope for spending on the crisis, response, and resiliency efforts. Once approved, this allocation will address the long-term global need to supplement existing reserve assets,” he said.