Yellen says new IMF SDR allocation not applicable at the moment By Reuters

By Andrea Shalal and David Lawder

WASHINGTON (Reuters) -U.S. Treasury Secretary Janet Yellen on Friday stated she doesn’t see one other allocation of Worldwide Financial Fund emergency reserves to member nations as applicable at the moment, when extra present reserves should be channeled to poorer nations.

Yellen instructed a information convention that the Treasury has requested the U.S. Congress for permission to lend $21 billion in present U.S. Particular Drawing Rights (SDR) to IMF belief funds for low- and middle-income nations, and hoped for approval.

The US is the biggest shareholder within the IMF, so its help for one more SDR allocation could be essential.

The IMF in August 2021 created and issued $650 billion in SDR belongings to member nations to help their restoration from the COVID-19 pandemic, however poor nations are clamoring for extra funds resulting from excessive inflation and a mounting debt disaster.

Civil society teams and lawmakers have urged the worldwide lender to difficulty one other $650 billion in SDRs – one thing akin to a central financial institution printing cash – to assist member nations grapple with overlapping well being, meals, power and inflation crises.

Specialists say it could be troublesome to win the 85% approval wanted for one more allocation given deep frustration that the Group of 20 main economies had not but met their dedication to recycle $100 billion of their SDRs from the final one.

Yellen echoed that time, and stated the USA was taking a look at different methods to assist enhance funding obtainable to needy nations, together with by means of grants to meals safety organizations and debt restructuring efforts.

The non-partisan One Marketing campaign, which tracks SDR pledges, stated solely $60 billion in pledges had been made so far, with a number of nations – together with Eire, Norway, Switzerland and Sweden – having didn’t make any pledges.

That will quantity to only over $80 billion together with the U.S. pledges, however One stated it didn’t anticipate congressional approval for that transfer to come back any time quickly.