The International Monetary Fund (IMF) has approved a general allocation of Special Drawing Rights (SDRs) to $250 billion to provide liquidity to the global economic system by supplementing Fund's member countries' foreign exchange reserves.
The formal approval of the IMF's board of governors came after the Fund's executive board backed the SDR allocations almost a month ago, following the G20 leaders' commitment during their April summit to boost global liquidity. (See: IMF turns borrower; signs deal with Japan, Canada and Norway)
The SDR allocation will be made on 28 August 2009 to its 186 members in proportion to their existing quotas in the Fund, based on their relative size in the global economy. Each participating country will get approximately 74 per cent of its quota through the allocation.
Total allocations will reach approximately $283 billion from the current level of $33 billion.
The IMF said that around $100 billion will go to the emerging markets and developing countries, of which low-income countries will get over $18 billion.
Additionally, IMF will provide for special one-time SDRs on 9 September 2009, as per last week's Fourth Amendment raising the members' cumulative SDR quota using a benchmark ratio. The total of special SDRs would amount to $33 billion.