The Group of Seven (G7) nations approved the first increase in International Monetary Fund (IMF) reserves since 2009, a move to help developing countries deal with the coronavirus pandemic.
Rishi Sunak, Britain’s finance minister, said the bloc’s finance ministers had agreed to support a “new and significant” increase in the size of the Special Drawing Rights (SDRs), the internal currency used by the International Monetary Fund.
The British Finance Minister said: “The historic agreement between the Group of Seven paves the way for decisive and coordinated action to support low-income countries in the world, ensuring that no country is left behind in the global economic recovery from the Coronavirus.”
The Director-General of the International Monetary Fund, Kristalina Georgieva, welcomed the news, and said that the meeting of G7 finance ministers was fruitful.
Last year, the International Monetary Fund said it wanted to increase SDR allocations to the equivalent of $ 500 billion, from the $ 293 billion agreed at the time of the last expansion in 2009, right after the global financial crisis.
This expansion was rejected by then-US President Donald Trump. Last month, US Treasury Secretary Janet Yellen said she would like to extend it but want more transparency about how SDRs are used and traded.
US sources familiar with the G7 talks said an increase of about $ 650 billion was being discussed.
For its part, the British Ministry of Finance said that additional SDRs will help poor countries “to meet essential needs such as vaccines and food imports, and to improve reserves in emerging markets and low-income countries. Income.”
Anti-poverty groups welcomed the move, but said there was more to be done to get richer countries to share unused SDRs with poor countries.