IMF TO FULFILL GENERAL ALLOCATION OF SDR TO MEMBER STATES OF IN AMOUNT OF $ 250 BILLION
ARKA
Sep 1, 2009
YEREVAN, September 1. /ARKA/. The International Monetary Fund fulfilled
the general allocation of SDRs Member States of the IMF amounting
to 250 billion U.S. dollars, in proportion to their existing quotas
in the Fund, a report posted on the official website of the IMF
stated. Armenia’s IMF quota is about 100 million U.S. dollars.
On August 7, 2009 Board of Governors of the International Monetary Fund
(IMF) approved a total allocation of special drawing rights (SDRs)
equivalent to 250 billion dollars to provide liquidity in the global
economic system through replenishment of foreign exchange reserves
of the Member States of the Fund.
IMF Executive Board endorsed the proposal for a general distribution,
after the leaders of the Group 20 pledged to increase global liquidity
at its April summit, and the International Monetary and Financial
Committee (IMFC) welcomed this commitment.
Part of the overall distribution, equivalent of almost 100 billion
USD, will be given to countries with emerging market and developing
countries, including low-income countries which will receive more
than 18 billion USD.
The total allocation of SDRs will be made on August 28, 2009 Member
States of IMF that are parties to the Department of Special Drawing
Rights (currently, 186 States Members) in proportion to their existing
quotas in the Fund, which are generally based on their relative size
in the world economy.
Under this allocation, each participating country will receive
SDR equivalent to approximately 74 per cent of its quota, and the
total distributions to Member States of the Fund may reach an amount
equivalent approximately to 283 billion USD, compared with about 33
billion USD (SDR 21.4 billion) at present.
As a separate step, the Fourth Amendment to the Articles of IMF
agreement was entered into force, providing a special one-time
allocation of SDRs.
This specific distribution of IMF members will be made on September
9 2009, 30 days after the date of entry into force of the Fourth
Amendment.
It will increase the relationship of cumulative SDR allocations
to Member States for their quotas on the basis overall control
coefficient, as envisaged in the amendment. The total amount of SDR,
established under the special allocation will amount to 21.5 billion
SDRs (about 33 billion USD).
"The special allocation of SDRs would make the distribution more
equitable and would eliminate the consequences of the fact that the
countries that joined the Fund since 1981, and those are more than
one-fifth of all members of the IMF are currently not receiving the
SDR distribution ", the report said.
The adoption of the Fourth Amendment, proposed in September 1997,
was correlated with the approval of the three-fifths of IMF members
having 85 percent of total number of votes. This threshold was reached
after the recent approval of the amendment of the United States.
>From the date of the general and special allocation of the funds
received by Member States under the new SDR allocations, they will be
considered as part of their reserve assets. Some members may decide
to sell all or part of SDRs allocated to them by other members in
exchange for hard currency.
For example, some may want to meet the needs of the balance of
payments, while others may prefer to buy a large amount of special
drawing rights with a view to change the structure of its reserves.
As a result of special and general distributions of SDR allocations
to Member States the cumulative amount will reach 204 billion SDRs
(about 316 billion USD).
"The general allocation of SDRs is an important example of
a multilateral cooperation in overcoming the global crisis and
providing a substantial support to Member States of the Fund during
this difficult period ", the report emphasized.
From: Emil Lazarian | Ararat NewsPress
