IMF to Provide SDRs to Broader Group of Countries – Georgieva

International Monetary Fund chief Kristalina Georgieva said on Sunday that the IMF is considering creating a new trust fund that could allow its members to lend their reserves from the fund to a broader group of countries, including middle-income countries vulnerable to climate change.

Georgieva said the leaders of the G7 had given the IMF a "green light" to continue working on the plan, and China had expressed interest, along with middle-income countries that could benefit from such plan.

She said the IMF would continue working on the Resilience and Sustainability Trust, which could help countries combat climate change or improve their health care systems.

G7 leaders on Sunday said they welcomed an expansion of the global lender’s emergency reserves by $650 billion, and backed a global target of providing $100 billion to the most vulnerable countries, but said other countries should participate.

Georgieva said she will work with IMF members in the coming months on how to reallocate some of their SDRs or use budget loans to reach the $100 billion target.

The International Monetary Fund expects its board of directors to formally approve the allocation of $650 billion in SDR in August, paving the way for member states to donate their non-essential reserves to others in need.

A new trust fund that was previously unreported could help expand efforts and make money available to more countries, and for broader initiatives, in line with global goals to combat climate change.

The IMF already has an instrument, the Poverty Reduction and Growth Trust Fund, that allows members to share their IMF reserves, known as Special Drawing Rights, with the poorest countries.

Meantime, small island states and other middle-income countries that have been hit hard by the coronavirus pandemic are not eligible for financing through the IMF.