The IMF will define the delivery of USD 650 billion to its member countries in June

Of the USD 650 billion that the International Monetary Fund (IMF) plans to deliver to different countries of the world, Ecuador would correspond to USD 1.000 million, a transfer that would be defined in June of this year.

This March 23, the board of directors of the International Monetary Fund (IMF) discussed an increase in the capital of its member countries to face the crisis caused by the coronavirus.

The position of the international organization would place Ecuador as one of the beneficiary countries, once the entity would extend its Special Drawing Rights (SDR)

In a statement, the IMF announced that the transaction of the USD 650 billion that will be distributed among the partner countries will not involve new debt.

Kristalina Georgieva, managing director of the IMF, indicated that she is very encouraged by the initial discussions about a possible allocation of SDRs because it would benefit all member countries and support the global recovery from the crisis caused by Covid-19.

She said that would be “a powerful sign of the determination of IMF members to do everything possible to overcome the worst recession.”

She commented that if a new SDR allocation is approved it would be a substantial and direct liquidity boost to countries, without increasing the debt burden.

She noted that this would free up much-needed resources for member countries to help fight the pandemic, including support for vaccination programs and other urgent measures.

“I intend to present a formal proposal to the Board of Executive Directors in June to consider the allocation of USD 650 billion, based on an assessment of the long-term global reserve needs of IMF member countries, and in line with the Constitutive Agreement and the mandate ”, he specified.

She explained that IMF staff will develop new measures to improve transparency and accountability in the use of SDRs.

She said staff would also explore options for members with strong financial positions in order to reallocate resources.

For the proposal for the delivery of this money to be finalized, the Managing Director must first present it and be approved by the Executive Board.

It will then be presented to the Board of Governors, whose decision to approve an allocation of SDRs would require the support of members representing 85% of the majority of the total votes.

The value of a SDR is set in a basket of five major currencies: the US dollar, the euro, the Chinese yuan, the Japanese yen, and the British pound. Currently, 1 SDR is valued at USD 1.43.