IMF using SDR instrument to distribute $US250 billion among member nations

The International Monetary Fund reported about its intention to provide $US250 billion to member nations' foreign exchange reserves to boost liquidity amid the global economic crisis. The IMF board of governors decided to approve the allocation of Special Drawing Rights (SDRs) equivalent to $US250 billion.

The amount represents the largest general SDR allocation in the institution's six-decade history and will take effect on August 28. On August 7 the IMF board endorsed the proposed special SDR allocation that had been endorsed by the institution's executive board on July 17.

As is known, the increase in SDRs was part of a $US1.1 trillion ($1.32 trillion) plan agreed at the Group of 20 summit in London in early April to tackle the global financial and economic crisis. According to the fund 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.”