U.S. opposition slows down major IMF liquidity help  

15.04.2020 - Korneychuk Evgeniya
U.S. opposition slows down major IMF liquidity help   

The U.S. opposition wanted to stop the International Monetary Fund from using its strong tools to support other countries in fighting coronavirus on Wednesday. IMF proposed to create a new portion of Special Drawing Rights.

The national bank will print new money, which was suggested by financial specialists and non-profit groups, to give as much $500 billion for IMF’s 189 country members.

IMF’s official unit of exchange will be called SDRs USDXDR=R, which is based on euro, dollars, sterling, yen, and yuan. SDRs are located in the Fund and it is equivalent to the shareholdings of each country members.

During the economic crisis of 2009, IMF authorized a $250 billion allotment of SDRs. This move increased liquidity for penniless countries.

Doing so again now could provide more flexibility to the 100 countries that have already sought IMF emergency loans and grants, and allow new lending to countries with “unsustainable” debt burdens, such as Argentina.

Through this, the IMF could support more flexibility to other 100 countries that asked for emergency credits and subsidies. It can also lift debt burdens to low-income countries like Argentina.

Finance authorities are planning to discuss the issue during this week’s virtual IMF and World Bank Spring Meetings. However, various sources acquainted with the Fund’s deliberations state the United States, IMF’s dominant investor, actively opposes such a move.

The opposition happened when U.S. and China were still progressing over the causes of coronavirus and a constant trade war. The U.S. and Iran tension almost started a war last January.

The U.S. Treasury Department would want to see the IMF focus on helping other countries by utilizing its $1 trillion in existing resources, incorporating $100 billion in crisis funds.

Risk disclaimer "Market Solutions Ltd – Suite 305 Griffith Corporate Centre P.O. Box 1510 Beachmont, Kingstown, St Vincent and the Grenadines is a financial services institution outside the European Union Area, which is subject to the supervision of the IFMRRC Certificate 0395 AA V0128 Trading in Forex/ CFDs and Other Derivatives is highly speculative and carries a high level of risk. It is possible to lose all your capital. 70% of trading deals can be unprofitable. These products may not be suitable for everyone and you should ensure that you understand the risks involved. Seek independent advice if necessary. Speculate only with funds that you can afford to lose. This Website may contain information in particular regarding financial services and products that could be regarded b a E.U. supervisory authority as an offer of financial services targeted in Europe. ESMA intervention measures do not apply to customers of Market solutions Ltd and it is your responsibility to choose a company which is most suitable for your trading needs. By clicking continue you confirm that you have read, understood and agree to the risk disclosures, terms of service, cash policies, privacy policies and this notice and that you are visiting this website on your own initiative, without any encouragement whatsoever from Umarkets.com or Market Solutions limited." Cookies notification: “We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we assume that you are happy with it. Continue

Help with deposit?