The executive board of the International Monetary Fund (IMF) has backed an allocation of Special Drawing Rights (SDRs) equivalent to 250 billion U.S. dollars to provide liquidity to the global economic system by supplementing 186 member countries' foreign exchange reserves.
The proposed SDRs will be allocated according to the IMF members' existing quotas in the fund. The equivalent of nearly 100 U.S. billion of the new allocation will go to emerging markets and developing countries.
The proposal will now be submitted to the IMF's board of governors for final approval.
"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.
The SDR allocation was requested as part of a 1.1 trillion U.S. dollars plan agreed at the G20 summit in London in April and endorsed by the International Monetary and Financial Committee (IMFC) to tackle the global financial and economic crisis by restoring credit, growth and jobs in the world economy.
If approved by the board of governors with an 85 percent majority of the total voting power in a vote scheduled to close on Aug. 7, the SDR allocation will be in effect on Aug. 28.
