August 24, 2021 (MLN): The International Monetary Fund (IMF) has approved history’s biggest funding of $650 billion. The Funding was approved to mitigate the crisis risen after pandemic.
Allocation will provide additional liquidity to the global economic system. This would help countries to improve their foreign exchange reserves. Moreover, this would help paying expensive debts to lower borrowing.
About US$275 billion is going to emerging and developing countries. Of this, low-income countries will receive about US$21 billion – equivalent to as much as 6% of GDP in some cases.
Over the past 16 months, some members have already pledged to lend US$24bn, including US$15 billion from their existing SDRs.
This SDR allocation is a critical component of the IMF’s broader effort to support countries through the pandemic US$117 billion in new financing for 85 countries; debt service relief for 29 low-income countries policy advice and capacity development support to over 175 countries to help secure a strong and more sustainable recovery.
