## THE CASE FOR A GENERAL ALLOCATION OF SDRs DURING THE THIRTEENTH BASIC PERIOD

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### Executive Summary
- Purpose: Determine whether there is a case for a general SDR allocation or cancellation for the Thirteenth Basic Period commencing on January 1, 2027, with the Managing Director required to report no later than June 30, 2026.
- Decision: The paper does not present a proposal for a new allocation of SDRs. The Managing Director does not plan to make a proposal by June 30, 2026.
- Rationale:
  - No clear economic case at present for a new allocation consistent with meeting the long-term global need to supplement existing reserve assets (Article XVIII, Section 1(a)).
  - No broad support among participants at present for a new allocation (Article XVIII, Section 4(b) and 4(d)).
- Forward action: Management and staff will continue to monitor global developments and remain in close contact with the membership. The Managing Director may make a proposal during the Thirteenth Basic Period on her own initiative or at the request of the Board of Governors or the Executive Board.

### Background
- Legal timing and requirements:
  - Twelfth Basic Period: began January 1, 2022; scheduled to end December 31, 2026.
  - Thirteenth Basic Period: commences January 1, 2027.
  - Managing Director must determine whether there is a case for a general allocation or cancellation by June 30, 2026 (Article XVIII, Section 4(c)).
  - Any proposal must be (i) consistent with meeting the long-term global need to supplement existing reserve assets (Article XVIII, Section 1(a)) and (ii) have broad support among participants (Article XVIII, Section 4(b)).
  - Executive Board concurrence required under Article XVIII, Section 4(a); Board of Governors approval requires an 85 percent majority of total voting power of participants in the SDR Department (Article XVIII, Section 4(d)).

### Case for an Allocation — Key Findings
- Global economic and reserve context since the 2021 General SDR allocation:
  - The 2021 General SDR Allocation was the largest in Fund history (SDR 456.5 billion).
  - Global developments since 2021 have been characterized by resilient economic growth, high levels of international reserve assets, ample global liquidity, and improved access of emerging market economies to international capital markets.
  - Reserve assets have increased by over 21 percent globally since 2021.
  - Reserve assets have increased by over 22 percent for emerging and developing countries (excluding China) since 2021.
  - The stock of SDRs relative to global reserves, capital flows, and international trade remain elevated, well above the levels before the 2021 Allocation and above historical averages.
  - The war in the Middle East has had major impacts on many members; those impacts are asymmetric across members and the duration is unknown. Staff will continue to monitor in case effects become more persistent and widespread.
- Political/decision-making support:
  - Recent bilateral consultations indicate a lack of sufficient support: Executive Directors representing a majority of participants in terms of voting power indicated they would not support a new allocation in the current context.
  - Historical context of prior general allocations:
    - 2021 General SDR Allocation: SDR 456.5 billion (context: COVID-19 Crisis).
    - 2009 General Allocation: SDR 161.2 billion, plus a special allocation of SDR 21.5 billion to implement the Fourth Amendment to the Articles of Agreement (context: Global Financial Crisis).
    - Prior to 2009, no general allocation had been approved since 1981.

### Conclusion and Policy Implications
- Conclusion:
  - The Managing Director does not plan to make a proposal for a general allocation or cancellation by June 30, 2026, based on the requirements of Article XVIII, Section 4, and the absence of both a clear economic case and the necessary broad support among participants.
  - The Managing Director will not propose a Board discussion of the issue on this occasion.
- Continued options:
  - This decision does not preclude the Managing Director from making a proposal during the Thirteenth Basic Period, at her own initiative or at the request of the Board of Governors or the Executive Board, including in the event of unexpected major developments that could motivate such a proposal.

*Report of the Managing Director to the Board of Governors Pursuant to Article XVIII, Section 4(c) for the Thirteenth Basic Period, June 26, 2026; Staff Report completed June 15, 2026.*

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_Source: https://www.imf.org/-/media/files/publications/pp/2026/english/ppea2026021.pdf_