IMF to inject $250 bn into members` forex reserves
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Last Updated: Friday, August 14, 2009, 00:06
  
Washington: The International Monetary Fund on Thursday said it would inject USD 250 billion into foreign exchange reserves of member nations to boost liquidity amid the global economic crisis.

Employing a rarely used tool, the IMF board of governors approved the allocation of Special Drawing Rights (SDRs) equivalent to USD 250 billion, the multilateral institution said in a statement.

It was by far the largest general SDR allocation in the institution's six-decade history and will take effect August 28.

For countries that joined the IMF after 1981 -- more than one-fifth of the current membership -- this will be their first time receiving an SDR allocation.

The IMF board of governors endorsed on August 7 the proposed special SDR allocation that had been endorsed by the institution's executive board on July 17.

An SDR is an interest-bearing IMF asset that is based on a basket of international currencies -- the dollar, yen, euro and pound -- that is calculated daily and which members can convert into other currencies.

The general increase in SDRs was part of a USD 1.1 trillion plan agreed at the Group of 20 summit in London in early April to tackle the global financial and economic crisis.

All 186 IMF member nations will share in the allocation "in proportion to their existing quotas in the fund, which are based broadly on their relative size in the global economy," the Washington-based institution said.

Bureau Report


First Published: Friday, August 14, 2009, 00:06


Tag: IMFreservesforex
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