ArmInfo. The largest allocation by International Monetary Fund of Special Drawing Rights (SDRs) in history-about US$650 billion-comes into effect today. Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF) made the following statement, according to the IMF website.
Answering to ArmInfo's question, Mehdi Raissi, IMF Resident Representative in Armenia, informed that according to the al11location of SDRs to the proportionally paid quotas of IMF members, in the case of Armenia, the allocated amount was SDR 123.4 million (about USD 175.2 million, using the SDR value as of August 24). Raissi clarified that the USD 650 billion referred to in the article is a general Special Drawing Right (SDR) allocation by the International Monetary Fund to all its member countries and not a "new stand-by loan". The SDR is an international reserve asset created by the IMF to supplement members' international reserves. It is not a currency, but instead a potential claim on freely usable currencies of participants in the SDR Department (currently all members of the IMF). The value of the SDR is set daily by the IMF on the basis of five currencies included in the SDR basket (U.S. dollar, Japanese yen, euro, pound sterling, and Chinese renminbi). The latest SDR allocation, which was made on August 23, 2021, is in proportion to members' paid-in IMF quotas.
Georgieva stressed that this allocation is a significant shot in the arm for the world and, if used wisely, a unique opportunity to combat this unprecedented crisis. Countries can use the space provided by the SDR allocation to support their economies and step up their fight against the crisis.
SDRs are being distributed to countries in proportion to their quota shares in the IMF. This means about US$275 billion is going to emerging and developing countries, of which low-income countries will receive about US$21 billion - equivalent to as much as 6 percent of GDP in some cases.
To note, among the former USSR countries, the above additional issue of SDR is distributed in 2021 according to quotas in the IMF as follows: Russia received the largest $ 17.48 billion (3% of the country's international reserves), $ 2.725 billion (9.6%) - Ukraine, $ 1.569 billion (2 , 5%) - Kazakhstan, $ 923 million (12.3%) - Belarus, $ 746 million (2.3%) - Uzbekistan, $ 531 million (1.1%) - Azerbaijan, $ 285 million (6.6%) - Georgia , $ 236 million (18.6%) - Tajikistan, $ 234 million (6.9%) - Moldova, and more than $ 175 million (5.9%) - Armenia. In total, within the framework of this additional issue of SDR, the CIS states and Georgia were allocated $ 25 billion.
Recall that on May 17, 2019, the IMF approved the provision of a stand-by credit line to Armenia for a three-year "transit period" in the amount of SDR 180 million (equivalent to almost $ 248.2 million) or about 139.75% of Armenia's quota in the IMF. From this amount, it was planned to immediately receive SDR 25.714 million (equivalent to nearly $ 35.5 million), with the remainder foreseen based on six half- year estimates.
A year later, in mid-May 2020, the IMF increased its financial support to Armenia by SDR 128.8 million (about $ 175 million), which, together with the authorities' intention to attract resources accumulated under the SBA, made it possible to receive SDR 206 million (about $ 280 million) payable immediately. These loan funds are aimed at strengthening the economic foundations and policies of Armenia, as well as carrying out structural reforms, in particular, improving the efficiency of governance and improving the business environment. And on December 11, 2020, the IMF approved for Armenia the results of the third stage of the three-year program, thereby opening access to reserve financing - a Stand-By loan in the amount of SDR 25.714 million (almost $ 36.7 million). Within the framework of this program, a total of 231.657 million SDR (about $ 315 million) was provided to Armenia.
