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France to release 5 bln euros of SDRs to vulnerable countries under G20 programme

file photo: a participant stands near a logo of imf at the international monetary fund world bank annual meeting 2018 in nusa dua
FILE PHOTO: logo of IMF

France will release some 4 billion International Monetary Fund (IMF) Special Drawing Rights (SDRs), worth about 5 billion euros to the world’s most vulnerable countries under a G20 programme and expects to release more next year, the finance ministry said on Friday.

It said France had agreed to contribute loans to two IMF funds, the Poverty Reduction and Growth Trust and the Resilience and Sustainability Trust, with 1.2 billion SDRs for the former and 3 billion SDRs for the latter.

It will also give subsidies of 40 million euros and 63 million euros repectively to the funds.

The SDRs correspond to about 20 per cent of the SDRs that France had been awarded in August 2021.

The ministry said France would mobilise up to 30 per cent of the SDRs it had received, with decisions on the issue due at a summit in Paris in June 2023.

The contributions are part of a G20 initiative – led by France and the United States – to reallocate $100 billion worth of SDRs to the world’s most vulnerable countries.

At a July 2021 summit in Venice, G20 finance ministers urged the IMF to come up with ways for countries to steer IMF resources they do not need to countries that need them. The IMF in August 2021 allocated $650 billion in SDRs, – which are a form of foreign currency reserves – to its 190 member countries.

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