ABU DHABI, — The International Monetary Fund, IMF, today announced that it had received additional commitments of about 40 billion Special Drawing Rights, or SDRs, from nine members, bringing total commitments to about SDR 300 billion (US$400 billion) from 35 members.
Under these commitments, 20 borrowing agreements for a total of about SDR 211 billion are now effective with maximum terms through end-2020, Since the October 2016 Annual Meetings of the International Monetary Fund, IMF, further progress has been made in securing commitments to provide bilateral borrowed resources under the IMF’s 2016 borrowing framework, the IMF said in a statement posted on its website.
In welcoming these commitments, Christine Lagarde, IMF Managing Director, said she was encouraged by the commitments received from the membership to provide bilateral resources under the new borrowing framework. “Bilateral borrowing constitutes the Fund’s important third line of defense after quotas and the New Arrangements to Borrow (NAB). These commitments will preserve the overall lending capacity of the IMF and provide confidence that the Fund will continue to be able to address the needs of our membership.”
The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official reserves. As of March 2016, 204.1 billion SDRs (equivalent to about $285 billion) had been created and allocated to members. SDRs can be exchanged for freely usable currencies, according to the IMF. The value of the SDR is based on a basket of five major currencies the U.S. dollar, euro, the Chinese renminbi (RMB), the Japanese yen, and pound sterling as of 1st October, 2016.
The currency value of the SDR is determined by summing the values in U.S. dollars, based on market exchange rates, of a basket of major currencies (the U.S. dollar, Euro, Japanese yen, pound sterling and the Chinese renminbi). The SDR currency value is calculated daily (except on IMF holidays or whenever the IMF is closed for business) and the valuation basket is reviewed and adjusted every five years. WAM/MMYS
Source: Emirates News Agency