Support grows for channelling Special Drawing Rights through MDBs
SDRs are foreign exchange reserve assets maintained by the International Monetary Fund.
The governments of France, Japan, Spain, and the United Kingdom together with Brazil (the incoming G20 Presidency), the International Monetary Fund (IMF), the United Nations, ministers from Africa and Latin America, the Asian Development Bank, and other international institutions have pledged strong support for a proposal by the African Development Bank Group (AfDB) and the Inter-American Development Bank (IDB) for the channelling of special drawing rights (SDRs) through multilateral development banks (MDBs).
SDRs are foreign exchange reserve assets maintained by the IMF.
Speaking at a special roundtable convened at the COP28 in Dubai on 4 December 2023 to discuss leveraging SDRs for climate and development, the participants commended the two banks for their innovative proposal that would deliver much-needed financial resources to vulnerable countries.
The IMF issued a historic general allocation of SDRs worth $650 billion in 2021 to help countries deal with the impact of a global crisis triggered by the Covid-19 pandemic. Africa, with a population of more than 1.2 billion, received only $33 billion representing about 5 percent of the total allocation, the smallest portion among the different regions of the world. Similarly, Latin America and the Caribbean received only 8 percent of the total allocation.
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