Washington – Thursday’s International Monetary Fund approved a $ 650 billion expansion of lending agency resources in 190 countries with the aim of providing more support to vulnerable countries fighting the coronavirus pandemic.
The $ 650 billion increase in reserves is the largest in IMF history, said Cristalinage Orgieva, managing director of the IMF. She said the move would provide terribly necessary reserves to poor countries suffering from the severe pandemic-induced depression and the need to obtain and administer millions of vaccines.
By comparison, the IMF has agreed to increase its reserves, known as Special Drawing Rights, by $ 250 billion to combat the global recession following the 2008 financial crisis.
US Treasury Secretary Janet Yellen told the IMF Panel that raising the SDR “significantly increases global reserves.” She said it is important for rich countries that do not need to increase their resources to provide their additional support to poor countries.
When the Biden administration approved the plan in February, the idea of increasing the IMF reserve was supported and showed a reversal from the Trump administration, which was opposed to the effort.
Republicans in Congress opposed the increase in IMF resources, saying that the increase would benefit countries considered US enemies, such as China, Russia and Iran.
The Treasury said the United States reserves the right to refuse to engage in SDR transactions with “countries whose policies are against US interests.”
Authorities have indicated that the first distribution of increased reserves could begin in August after a detailed plan was submitted for approval by the IMF’s board of directors in June.
A communiqué from the IMF’s Policy Board, which consists of finance ministers representing members of the institution, also supported efforts to mitigate the impact of climate change on the global economy. This represents another change from the Trump administration that removed the United States from the Paris Agreement, an action reversed by the Biden administration.
“In line with the Paris Agreement, we are strongly committed to addressing climate change through measures to accelerate the transition to a more environmentally friendly society and a more employed economy while protecting the affected people. “The IMF communiqué said.
Yellen said in his statement that the IMF and the World Bank will play an important role in helping to combat climate change.
“The United States is committed to working with international partners to tackle climate change,” Yellen said in a statement.
The IMF-World Bank meeting has been virtually held since the pandemic broke out in early 2020. However, Georgieva said the fall meeting of the two agencies plans to return to a face-to-face rally in Washington. , May succeed in suppressing the pandemic.
The formal meeting will end on Friday at the World Bank Policy Committee Development Committee meeting. Yellen and Federal Reserve Board Chair Jerome Powell are US representatives of the session.
This week, the IMF released its latest economic forecast, which predicts that the global economy will grow 6% from the 5.5% growth forecast in January this year. The performance gains were primarily due to accelerated immunization and the $ 1.9 trillion bailout program promoted by President Joe Biden in Congress last month.
However, the IMF communiqué said, “The outlook for recovery is very uncertain and uneven both inside and outside the country,” due to factors such as uneven access to vaccines and lack of financial resources in many low-income countries. I warned.
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IMF Policy Board Approves $ 650 Billion Resource Increase
Source link IMF Policy Board Approves $ 650 Billion Resource Increase