Yellen says new IMF SDR allocation not appropriate at this time

WASHINGTON, Oct 14 (Reuters) – U.S. Treasury Secretary Janet Yellen on Friday mentioned she doesn’t see one other allocation of Worldwide Financial Fund emergency reserves to member international locations as applicable presently, when extra present reserves have to be channeled to poorer international locations.

Yellen instructed a information convention that the Treasury has requested the U.S. Congress for permission to lend $21 billion in present U.S. Particular Drawing Rights (SDR) to IMF belief funds for low- and middle-income international locations, and hoped for approval.

America is the biggest shareholder within the IMF, so its help for one more SDR allocation can be essential.

The IMF in August 2021 created and issued $650 billion in SDR belongings to member international locations to assist their restoration from the COVID-19 pandemic, however poor international locations are clamoring for extra funds as a result of excessive inflation and a mounting debt disaster.

Civil society teams and lawmakers have urged the worldwide lender to challenge one other $650 billion in SDRs – one thing akin to a central financial institution printing cash – to assist member international locations grapple with overlapping well being, meals, vitality and inflation crises.

Consultants say it might be tough to win the 85% approval wanted for one more allocation given deep frustration that the Group of 20 main economies had not but met their dedication to recycle $100 billion of their SDRs from the final one.

Yellen echoed that time, and mentioned the USA was different methods to assist enhance funding out there to needy international locations, together with by means of grants to meals safety organizations and debt restructuring efforts.

The non-partisan One Marketing campaign, which tracks SDR pledges, mentioned solely $60 billion in pledges had been made so far, with a number of international locations – together with Eire, Norway, Switzerland and Sweden – having didn’t make any pledges.

That will quantity to simply over $80 billion together with the U.S. pledges, however One mentioned it didn’t anticipate congressional approval for that transfer to return any time quickly.

Reporting by David Lawder and Andrea Shalal; Modifying by Chizu Nomiyama and Diane Craft

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