CARBIS BAY, England (Reuters) – The United States and other Group of Seven nations are considering reallocating $ 100 billion from the international monetary fund to help countries struggling to cope with the COVID-19 crisis, the House said. White.
The topic will be on the table when G7 leaders discuss how to help lead the global recovery from the coronavirus pandemic at a three-day summit in Cornwall, England, which began on Friday.
“The United States and our G7 partners are actively considering a global effort to multiply the impact of the proposed allocation of Special Drawing Rights (SDRs) to the countries most in need,” said the office of the president of the United States.
“At potentially up to $ 100 billion in size, the proposed effort would further support health needs, including vaccines,” he said, adding that it would help promote a more sustained and inclusive global recovery.
SDRs are the reserve asset of the IMF and can be exchanged for dollars, euros, British pounds, yen, or renminbi. Member states can loan or donate their SDR reserves to other countries for use.
The United States, which has aimed for the SDR allocation to be distributed during the “late (northern) summer,” said Friday: “We strongly support the effort to recycle SDRs to continue to support health needs.”
The IMF did not immediately comment.
IMF Managing Director Kristalina Georgieva, who will speak with G7 leaders virtually this weekend, said at a separate event on Wednesday that she expected the fund’s governors to approve a $ 650 billion increase in SDRs by mid-August. .
The global lender continues to study how richer countries could donate or lend their reserves to benefit poorer nations. Details are expected in early fall.
French President Emmanuel Macron on Thursday called on the other G7 nations to find an agreement on reallocating $ 100 billion in SDR to African states.
Global finance chiefs agreed in April to issue new SDRs and extend a debt service freeze to help developing countries deal with the pandemic, though only $ 34 billion of the $ 650 billion in new reserves will be allocated. to Africa, as SDRs are issued based on the size of a member’s stake in the IMF.
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