G7 eyes allocating $100 bln from IMF funds to COVID-ravaged nations-US

The United States and other Group of Seven nations are considering reallocating $ 100 billion from the International Monetary Fund war chest to help countries struggling hardest with the COVID-19 crisis, the White House said.

The issue will be on the table when G7 leaders discuss how to steer the world’s recovery from the coronavirus pandemic at a three-day summit in Cornwall, south-west England, starting 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 on the countries most in need,” said the US President’s Office.

“With a potential of up to $ 100 billion in project, the proposed actions would further support health needs – including vaccinations – and help enable greener, more resilient economic recovery in vulnerable countries and a more balanced, sustainable and inclusive global recovery promote.”

The US has aligned the SDR allocation for “late (northern) summer” and said on Friday: “We strongly support efforts to recycle SDRs to further meet health needs.”

SDRs are the IMF’s currency reserves and can be exchanged for dollars, euros, pounds sterling, yen and Chinese yuan or renminbi.

French President Emmanuel Macron on Thursday called on the other G7 countries to reach an agreement on the reallocation of USD 100 billion in SDRs to African countries.

The world’s finance chiefs agreed in April to increase the SDR by $ 650 billion and extend a debt service freeze to help developing countries cope with the pandemic, even though only $ 34 billion should be allocated to Africa.

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