IMF Set to Approve Largest-Ever Funds Redistribution
The International Monetary Fund (IMF) is set to approve a distribution of its reserve funds today.
In early July, IMF’s executive board approved a $650 billion allocation of special drawing rights (SPRs). The organization’s largest ever distribution—surpassing its $250 billion allocation in 2009—intends to boost international liquidity and to increase confidence in the IMF’s 190 member states’ economies in the wake of the COVID-19 pandemic.
Expect this increase in liquidity to be used by poor countries to increase medical infrastructure to respond to COVID-19 and the Delta Variant. As the new variant of the disease spreads rapidly across the world, many countries are scrambling to increase vaccination rates and prevent transmission of the disease. Increases in IMF funding will allow countries to not only enhance their vaccination and public health capabilities, but also allow relief funding for industries affected by the virus.
Additionally, expect the IMF to call on wealthy nations to redistribute this additional funding to poorer nations with weaker capability to combat COVID-19. The IMF is also asking wealthy nations to support their poorer neighbors’ medical infrastructure through vaccine-sharing programs like COVAX and by donating additional medical supplies when possible.
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