IMF chief sees 'high degree of uncertainty' in global outlook
The top of the International Monetary Fund on Monday said the global lender needed more resources to greatly help heavily indebted countries, citing a highly uncertain global monetary outlook and a growing divergence between rich and poor countries.
IMF Managing Director Kristalina Georgieva, who has long advocated a fresh allocation of the IMF's own currency, Particular Drawing Rights (SDRs), said doing so now would offer more funds to work with address both the health and financial crisis, and accelerate moves to an electronic and green economy.
Under outgoing President Donald Trump, America, the IMF's greatest shareholder, has blocked such a fresh SDR allocation, a move comparable to a central bank printing money, because it would provide more resources to richer countries because the allocation will be proportionate to their shareholding.
Swedish Finance Minister Magdalena Andersson, the new chair of the IMF's steering committee speaking at an on the web news conference with Georgieva, said it had been clear the necessity for liquidity remained great, and she would consult with member countries in options for expanding liquidity.
Andersson, the initial European to head the International Monetary and Financial Committee found in a lot more than 12 years and the initial women, started her three-year term within the role on Mon.
Georgieva said the IMF had rapidly increased concessional financing to emerging market and developing economies, including through donations by member countries of some $20 billion found in existing SDRs. That could continue to take up a crucial role, but further steps were wanted, she said.
"It will continue being so important, a lot more crucial, for us in order to expand our capacity to aid countries that contain fallen behind," Georgieva stated.
She said a fresh SDR allocation had under no circumstances been taken off the table by IMF members, she said, adding that some members continued to go over it just as one move. A possible sale of gold from the IMF's reserves would have "some opportunity costs" for the IMF, but will be up to members, she explained.
She said she expected the Band of 20 major economies to extend the existing moratorium in official debt service payments by the poorest countries, now slated to end in June, but much would be based upon the pace of vaccinations in coming months.
