IMF board approves record $650 billion to aid virus fight
The board of governors of the International Monetary Fund (IMF) on Monday greenlit increasing the institution’s lending capacity by $650 billion, the last step in approving an initiative to boost aid to the most vulnerable countries.
“This is a historic decision – the largest SDR (Special Drawing Rights) allocation in the history of the IMF and a shot in the arm for the global economy at a time of unprecedented crisis,” IMF head Kristalina Georgieva said in a statement.
The program, which had already been approved by the IMF’s executive board in mid-July, will be implemented on August 23.
It had been delayed when the Trump administration - the U.S. is the IMF’s biggest shareholder - blocked it in early 2020.
The U.S.’s position changed under President Joe Biden and Treasury Secretary Janet Yellen.
Newly issued SDRs will be allocated to member countries in proportion to their IMF quota, the lender said.
Emerging and developing nations are to receive around $275 billion in total.
At: https://www.bloomberg.com/news/articles/2021-08-02/imf-nations-approve-record-650-billion-to-help-withstand-virus
IMF Director Kristalina Georgieva (middle), with U.S. Treasury Secretary Janet Yellen and other officials at the G20 Finance Ministers Summit in Venice in July.
A record 456 billion Special Drawing Rights (equal to around $650 billion) will be lent a nearly zero interest to all 190 member nations.
The central bank reserve support program, similar to one enacted by the IMF in 2009, had been delayed due to objections from the Trump administration.
The U.S.’s position changed under President Joe Biden and Treasury Secretary Janet Yellen.
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Particularly for 3rd world countries who, bereft of a hard currency of their own, are dependent on export income income and foreign loans/investments to keep their reserve levels healthy (without which hyperinflation can ensue).
And as you know, foreign/export income declined substantially for most of these countries in 2020.
The IMF, under Dominique Strauss-Kahn (a tragic figure who did a lot of good in the world - but was ultimately undone by his libido), a similar loan program in 2009 did wonders for restarting growth in the 3rd world in 2010.
It gave business in these countries the foreign exchange-related piece of mind they needed to invest again - which they did.
Hopefully the same will happen now (although who knows anymore, what with this blasted virus).
Thanks for reading and replying. 
