Press Release: IMF Governors Formally Approve US$250 Billion General SDR Allocation

IMF News, August 13, 2009

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Canonical URL: Press Release: IMF Governors Formally Approve US$250 Billion General SDR Allocation

The Board of Governors of the International Monetary Fund (IMF) approved on August 7, 2009 a general allocation of Special Drawing Rights (SDRs) equivalent to US$250 billion.
Purpose: to provide liquidity to the global economic system by supplementing Fund’s member countries’ foreign exchange reserves.
The IMF Executive Board backed the general allocation on July 17, 2009 (Press Release No 09/264), following the commitment made by G20 leaders at their April summit and welcomed by the International Monetary and Financial Committee (IMFC).

The general SDR allocation will be made on August 28, 2009 to IMF members that are participants in the Special Drawing Rights Department (currently all 186 members).
Allocation method: in proportion to members’ existing quotas in the Fund.
The allocation will provide each participating country with SDRs in amounts equivalent to approximately 74 percent of its quota.
The general allocation could increase Fund members’ total allocations to an amount equivalent to about US$283 billion, from about US$33 billion (SDR 21.4 billion).

The equivalent of nearly US$100 billion of the general allocation will go to emerging markets and developing countries.
Low-income countries will receive over US$18 billion.

The Fourth Amendment to the IMF Articles of Agreement providing for a special one-time allocation of SDRs has entered into force.
The special allocation will be made to IMF members on September 9, 2009, 30 days after the effective date of the Fourth Amendment.
The special allocation will raise the ratios of members' cumulative SDR allocations to quota using a common benchmark ratio as described in the Amendment.
Total of SDRs created under the special allocation would amount to SDR 21.5 billion (about US$33 billion).
Rationale: to make the allocation of SDRs more equitable and correct for the fact that countries that joined the Fund after 1981—more than one fifth of the current IMF membership—had never received an SDR allocation.
Approval requirement for the Fourth Amendment: approval by three fifths of the IMF membership with 85 percent of the total voting power; this threshold has been reached following the recent approval by the United States.

Members’ holdings of newly allocated SDRs will count, as of the date of each of the general and special allocations, toward their reserve assets.
Possible member actions:
- Some members may choose to sell part or all of their allocations to other members in exchange for hard currency (for example, to meet balance of payments needs).
- Other members may choose to buy more SDRs as a means of reallocating their reserves.

The special and general allocations will bring Fund members’ cumulative total of SDR allocation to SDR 204 billion (about US$316 billion).
The general SDR allocation is described as a key example of a cooperative multilateral response to the global crisis, offering significant support to the Fund's members in this challenging period.

Press Release No. 09/283 — August 13, 2009