The European Business Council for Africa

The International Monetary Fund (IMF) this week said it will draw up a proposal for a potential $650bn general allocation of its Special Drawing Rights (SDR) to support global economic recovery efforts.

SDRs are the institution’s reserve asset, which member countries can exchange for a basket of five currencies - the dollar, euro, yen, renminbi, and sterling. They can provide liquidity and boost reserves in times of need, with the added appeal of coming without the IMF’s dreaded conditionality.

In simple terms, it’s the lender’s version of printing money.

The plan is expected to be formally considered in June, and will carry the hopes of developing economies with it.

There’s been extensive lobbying for an increase to SDRs as an effective way to channel much-needed cash to developing regions, with much of this focusing on Africa. (...)


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Source: Nurmara