Sri Lanka gets USD 816 mn in new financing

The International Monetary Fund has allocated USD 816 million dollars (at current rates) through IMF’s Special Drawing Rights (SDR) facility. This form part of the total allocation of USD 650 billion made by the IMF for members’ states.

“The allocation is a significant shot in the arm for the world and, if used wisely, a unique opportunity to combat this unprecedented crisis,” Managing Director, IMF, Kristalina Georgieva said in a statement. Countries can use the SDR allocation to support their economies and step up their fight against the coronavirus crisis, but should not use the fiscal space to delay needed economic reforms or debt restructuring, the IMF said in a separate guidance document.

The SDR allocation came at an important time as many countries are in acute need of liquidity support to fight the pandemic with the spread of the more contagious Delta variant.

“The SDR allocation will provide additional liquidity to the global economic system – supplementing countries’ foreign exchange reserves and reducing their reliance on more expensive domestic or external debt.”

“It is a unique instrument that supports all IMF members, boosts reserves, helps build confidence, and sends a powerful signal of a cooperative multilateral response to the COVID-19 crisis.”

“The SDR allocation is a critical component of the IMF’s broader effort to support countries through the pandemic, which includes 117 billion dollars in new financing for 85 countries, debt service relief for 29 low-income countries, and policy advice and capacity development support to over 175 countries to help secure a strong and more sustainable recovery,” Georgieva added.

This allocation will help Sri Lanka to boost its official reserves which were around USD 3.8 last month.

The IMF’s last SDR distribution came in 2009 when member countries received 250 billion dollars in SDR reserves to help deal with the global financial crisis.

by Daily News Sri Lanka

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