Yellen says new IMF SDR allocation not appropriate at this time By Reuters

© Reuters. FILE PHOTO: U.S. Treasury Secretary Janet Yellen holds a information convention within the Money Room on the U.S. Treasury Division in Washington, U.S. July 28, 2022. REUTERS/Jonathan Ernst/File Photograph

By Andrea Shalal and David Lawder

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

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 international locations, and hoped for approval.

The US is the biggest shareholder within the IMF, so its assist for an additional SDR allocation could be essential.

The IMF in August 2021 created and issued $650 billion in SDR belongings to member international locations to help their restoration from the COVID-19 pandemic, however poor international locations 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 challenge one other $650 billion in SDRs – one thing akin to a central financial institution printing cash – to assist member international locations grapple with overlapping well being, meals, vitality and inflation crises.

Consultants say it could be troublesome to win the 85% approval wanted for an additional 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 mentioned the US was taking a look at different methods to assist increase funding out there to needy international locations, together with via grants to meals safety organizations and debt restructuring efforts.

The non-partisan One Marketing campaign, which tracks SDR pledges, mentioned solely $60 billion in pledges had been made up to now, with a number of international locations – 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 mentioned it didn’t anticipate congressional approval for that transfer to come back any time quickly.

Originally published at Gold Coast News HQ