IMF’s largest SDR allocation in history comes to effect

The largest allocation of Special Drawing Rights (SDR) in the history of the International Monetary Fund (IMF) to the tune of US $ 650 billion came into effect yesterday. 

“The largest allocation of Special Drawing Rights (SDRs) in history—about US $ 650 billion—comes into effect today. The allocation is a significant shot in the arm for the world and if used wisely, a unique opportunity to combat this unprecedented crisis,” IMF Managing Director Kristalina Georgieva said.

The SDR allocation will provide additional liquidity to the global economic system – supplementing countries’ foreign exchange reserves and reducing their reliance on more expensive domestic or external debt. Countries can use the space provided by the SDR allocation to support their economies and step up their fight against the crisis.

SDRs are being distributed to countries in proportion to their quota shares in the IMF. This means about US $ 275 billion is going to emerging and developing countries, of which low-income countries will receive about US $ 21 billion – equivalent to as much as 6 percent of GDP in some cases.

Sri Lanka is expecting around US $ 780-800 million equivalent SDR allocation.