THE United States and other Group of Seven nations are considering reallocating $100 billion from the International Monetary Fund’s war chest to help countries struggling most to cope with the COVID-19 crisis, the White House said.
The issue will be on the table when G7 leaders discuss how to help steer the world’s recovery from the coronavirus pandemic at a three-day summit in Cornwall, southwestern England, which begins on Friday.
“The United States and our G7 partners are actively considering a global effort to multiply the impact of the proposed Special Drawing Rights (SDR) allocation to the countries most in need,” the U.S. president’s office said.
“At potentially up to $100 billion in size, the proposed effort would further support health needs – including vaccinations – and help enable greener, more robust economic recoveries in vulnerable countries, and promote a more balanced, sustained, and inclusive global recovery.”
The U.S. has targeted the SDR allocation to be distributed around the “late (northern) summer” and on Friday said: “We strongly support the effort to recycle SDRs to further support health needs.”
SDRs are the IMF’s reserve asset, and are exchangeable for dollars, euros, sterling, yen and Chinese yuan or renminbi.
French President Emmanuel Macron on Thursday called on the other G7 nations to find an agreement on reallocating $100 billion in SDRs to African states.
World finance chiefs agreed in April to boost SDRs by $650 billion and extend a debt-servicing freeze to help developing countries deal with the pandemic, although only $34 billion was to be allocated to Africa.