## Press Release: IMF Executive Board Backs US$250 Billion SDR Allocation to Boost Global Liquidity

_IMF News, July 20, 2009_

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## Bibliographic details
- Published: July 20, 2009

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### Decision and purpose
- The Executive Board of the International Monetary Fund (IMF) backed an allocation of Special Drawing Rights (SDRs) equivalent to US$250 billion.
- Purpose: to provide liquidity to the global economic system by supplementing the Fund’s 186 member countries’ foreign exchange reserves.
- The proposal will be submitted to the IMF’s Board of Governors for final approval.
- Quote: “The SDR allocation is a key part of the Fund’s response to the global crisis, offering significant support to its members in these difficult times,” IMF Managing Director Dominique Strauss-Kahn said.
- Press Release No. 09/264; date: July 20, 2009.

### Allocation details and beneficiaries
- Equivalent of nearly US$100 billion of the new allocation will go to emerging markets and developing countries.
- Low-income countries will receive over US$18 billion.
- SDRs will be made to IMF members that are participants in the Special Drawing Rights Department (currently all members) in proportion to their existing quotas in the Fund.
- The operation will increase each country’s allocation of SDRs by approximately 74 percent of its quota.
- Fund members’ total allocation will increase to an amount equivalent to about $283 billion, from about $33 billion (SDR 21.4 billion).

### Context and linkage to wider plan
- The SDR allocation was requested as part of a US$1.1 trillion plan agreed at the G-20 summit in London in April and endorsed by the International Monetary and Financial Committee (IMFC).
- Objective of the plan: to tackle the global financial and economic crisis by restoring credit, growth and jobs in the world economy.

### Approval process and timing
- Final approval requires an 85 percent majority of the total voting power of the Board of Governors.
- A vote was scheduled to close on August 7.
- If approved, the SDR allocation will be in effect on August 28.

### Uses and potential member actions
- SDRs allocated to members will count toward their reserve assets, acting as a low cost liquidity buffer for low-income countries and emerging markets and reducing the need for excessive self-insurance.
- Some members may choose to sell part or all of their allocation to other members in exchange for hard currency to meet balance of payments needs.
- Other members may choose to buy more SDRs as a means of reallocating their reserves.

### Executive Board guidance and conditions
- The Executive Board stressed that the allocation should not weaken the pursuit of prudent macroeconomic policies.
- The allocation should not substitute for a Fund-supported program or postpone needed policy adjustments.
- Quote: "The allocation is a prime example of a cooperative monetary response to the global financial crisis," the Managing Director underscored.

*Source: Press Release No. 09/264, July 20, 2009.*

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## References

- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [Special Drawing Rights (SDRs)](https://www.imf.org/external/np/exr/facts/sdr.htm)
- [proposal](https://www.imf.org/external/np/exr/faq/sdrallocfaqs.htm)
- [US$1.1 trillion plan](https://www.imf.org/external/np/exr/faq/sdrfaqs.htm)
- [SDR allocation](https://www.imf.org/external/np/tre/sdr/proposal/2009/0709.htm)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr09264_