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IMF chief expects members to reach $100 bln target for shifting reserves to vulnerable countries

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WASHINGTON, Oct 13 (Reuters) – International Monetary Fund Managing Director Kristalina Georgieva on Wednesday stated she expects superior economies to reach their target of shifting $100 billion of $650 billion in newly created emergency reserves to countries in want.

Georgieva instructed reporters she was inspired by the IMF govt board’s consideration of a brand new Resilience and Sustainability Trust (RST) that might permit richer countries to donate or mortgage their share of the brand new Special Drawing Rights to extra countries than simply the low-income countries now eligible for such assist beneath the IMF’s Poverty Reduction and Growth Trust.

The IMF chief stated the fund was additionally setting up measures to improve transparency about using any SDRs.

Georgieva stated members broadly supported the creation of the brand new RST belief throughout an almost four-hour assembly of the manager board on Friday the place IMF workers answered questions on potential standards, monetary preparations and the target of the brand new belief.

“We want to be part of the solutions policymakers will have to make about long-term transformation on climate, but also beyond climate,” she stated.

“We were so encouraged that that resonated across the board, and some of our members, in strong positions, starting indicating the interest to contribute to this new trust.”

Asked about reservations expressed by some critics that the brand new belief would overlap with the mandate of the World Bank, Georgieva stated the fund was working intently with the multilateral improvement financial institution because it developed the brand new belief.

In truth, Georgieva stated the IMF’s first presentation concerning the RST was to the board of the World Bank, and a big World Bank staff participated within the presentation to the fund’s board.

German Finance Minister Olaf Scholz, in a press release ready for Thursday’s assembly of the International Monetary and Financial Committee, a steering committee for the fund, referred to as for a “clear delineation” of duties between the fund and establishments just like the World Bank, and stated any new belief should be “carefully designed to avoid unintended consequences and drawbacks.”

He stated the brand new belief ought to “neither induce facility shopping nor should it endanger members’ capacity to repay on regular fund programs.”

He additionally urged the fund to leverage the monetary engagement of multilateral improvement banks, significantly in areas corresponding to local weather change and pandemic preparedness, areas that he stated had been predominantly of their remit.

Reporting by Andrea Shalal and David Lawder; Editing by Andrea Ricci

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