Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

IMF should issue new reserves to help countries tackle overlapping crises - groups

Economy Oct 06, 2022 06:20PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., as IMF Managing Director Christine Lagarde meets with Argentine Treasury Minister Nicolas Dujovne September 4, 2018. REUTERS/Yuri Gripas

By Andrea Shalal

WASHINGTON (Reuters) -The International Monetary Fund should issue $650 billion in new emergency reserves to help its member countries grapple with overlapping health, food, energy and inflation crises, 140 civil society groups said in a letter to the IMF's board on Thursday.

IMF officials in July said a fresh issuance of Special Drawing Rights (SDR) reserves was among the options for aiding countries struggling with spillovers from Russia's war in Ukraine, but there were no active discussions on the matter.

The World Bank warned last month of the growing risk of a global recession as a result of the war, and said on Wednesday nearly 600 million people would still be living in extreme poverty - with income of just $2.15 a day - by 2030.

The groups' plea for a second major SDR allocation in just over a year comes as global finance officials prepare to meet in Washington for the annual meetings of the IMF and World Bank.

Similar calls have come from lawmakers and business groups in recent months, although critics say a new issuance would also deliver fresh assets to Russia, which remains an IMF member.

Backers say in practice Russia would be hard pressed to find any country to swap its SDRs into hard currencies.

Mark Plant, a former IMF official with the Center for Global Development, said it would be difficult to win the 85% approval needed for another allocation given deep frustration that the Group of 20 major economies had not met their commitment to recycle $100 billion of their SDRs from the last one.

The IMF in August 2021 created and issued $650 billion in SDR assets to member countries to aid their recovery from the COVID-19 pandemic, but poor countries are clamoring for more funds due to high inflation and a mounting debt crisis.

The letter, signed by Action Corps, Arab Watch Coalition, Center for Economic and Policy Research and other groups from around the world, said over 100 countries had used last year's SDR allocation in the first year.

Those countries needed more funds since they were struggling with the ongoing COVID-19 pandemic, soaring food and energy costs due to the war in Ukraine, climate disasters and high debt levels, the letter said.

They said 42 countries had exchanged their SDRs for hard currencies valued at $16 billion, and 69 countries used SDRS worth $80 billion in their budgets or for other fiscal purposes.

The non-partisan One Campaign, which tracks SDR pledges, said only $60 billion in pledges had been made thus far, with several countries - including Ireland, Norway, Switzerland and Sweden - having failed to make any pledges.

Sara Harcourt, senior policy director for development finance at the ONE Campaign, said it was shocking that so little progress has been made toward the $100 billion target.

"It's like there's a fire burning and the people in charge of the sprinklers aren't using them," she said.

IMF should issue new reserves to help countries tackle overlapping crises - groups
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Stephen Fa
Stephen Fa Oct 06, 2022 6:46PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
This is one reason I like bitcoin.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email