A Shot in the Arm—How Special Drawing Rights Can Help Struggling Countries

IMF Blog, August 26, 2021

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Canonical URL: A Shot in the Arm—How Special Drawing Rights Can Help Struggling Countries

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Authors: The Editors
Published: August 26, 2021

Overview of the SDR allocation

The largest allocation of Special Drawing Rights, or SDRs, in history—about $650 billion—came into effect earlier this week.
The allocation is described as "a significant shot in the arm for the world" and "a unique opportunity to combat this unprecedented crisis" if used wisely.

How SDRs provide support

SDRs 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.
Countries can use the space provided by the SDR allocation to support their economies and step up their fight against the crisis.

Distribution and impact by country group

SDRs are being distributed to countries in proportion to their quota shares in the IMF.
About $275 billion is going to emerging and developing countries.
Low-income countries will receive about $21 billion—equivalent to as much as 6 percent of GDP in some cases.

Further information and engagement

Read more about the historic allocation and how many of the IMF’s poorest member countries can benefit.
Podcast: IMF Podcasts · What $650bn in SDRs Means for the Global Recovery — featuring Ceyla Pazarbasioglu, head of the Strategy, Policy and Review Department at the IMF.
Engagement: "We want to hear from you! Click here for a 3-question survey on IMFBlog."

Source: A Shot in the Arm—How Special Drawing Rights Can Help Struggling Countries (The Editors, August 26, 2021)

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