The International Monetary Fund approved a record general allocation of $650 billion in reserve assets, better known as special drawing rights, to help member countries, especially emerging and developing nations, cope with the economic fallout from the coronavirus pandemic.
The allocation is the biggest in the fund's 77-year history and is meant to help boost global liquidity, the multilateral lender said on Monday. The allocation is effective from August 23.
The last time the fund took a similar measure, but on a smaller scale, was in 2009 when it distributed $250bn in SDR reserves to member countries amid the global financial crisis.
IMF managing director Kristalina Georgieva called it a "shot in the arm" for the global economy during an unprecedented crisis.
"The SDR allocation will benefit all members, address the long-term global need for reserves, build confidence and foster the resilience and stability of the global economy," she said.
"It will particularly help our most vulnerable countries struggling to cope with the impact of the Covid-19 crisis."
The assets were created by the fund to supplement the official reserves of its member countries. The SDR is the fund's unit of exchange and is made up of a basket of the world’s five leading currencies – the US dollar, the euro, the yuan, the yen and the UK pound.
While the SDR is not money in a classic sense as it cannot be used to buy things, it is an accounting unit for IMF transactions with central banks and a stable asset in the international reserves of member countries.
The new $650bn allocation is the equivalent to about 456bn SDRs.
Of the $650bn allocation, about $275bn will go to emerging markets and developing countries, including low-income nations, the multilateral lender said.
“We will also continue to engage actively with our membership to identify viable options for voluntary channelling of SDRs from wealthier to poorer and more vulnerable member countries to support their pandemic recovery and achieve resilient and sustainable growth," said Ms Georgieva.
One of the main options for members that have strong external positions is to voluntarily channel part of their SDRs to scale up lending for poor countries through the multilateral lender's Poverty Reduction and Growth Trust, the fund said. Concessional support through the programme is currently interest-free.
The IMF is also exploring other options to help poorer and more vulnerable countries in their recovery efforts. A new Resilience and Sustainability Trust could be considered to enable more sustainable growth in the medium term, it said.
The new SDR allocation was initially backed by the G20 in April.
Reserves are allocated to the 190 members of the IMF in proportion to their quota. About 42.2 per cent corresponds to the share of emerging market and developing economies, of which 3.2 per cent corresponds to poor countries, according to the Washington-based lender's website.
The funds are intended to help countries to free up resources for health care and social spending amid the Covid-19 pandemic that has resulted in the worst economic crisis in 2020 since the Great Depression.
The five stages of early child’s play
From Dubai-based clinical psychologist Daniella Salazar:
1. Solitary Play: This is where Infants and toddlers start to play on their own without seeming to notice the people around them. This is the beginning of play.
2. Onlooker play: This occurs where the toddler enjoys watching other people play. There doesn’t necessarily need to be any effort to begin play. They are learning how to imitate behaviours from others. This type of play may also appear in children who are more shy and introverted.
3. Parallel Play: This generally starts when children begin playing side-by-side without any interaction. Even though they aren’t physically interacting they are paying attention to each other. This is the beginning of the desire to be with other children.
4. Associative Play: At around age four or five, children become more interested in each other than in toys and begin to interact more. In this stage children start asking questions and talking about the different activities they are engaging in. They realise they have similar goals in play such as building a tower or playing with cars.
5. Social Play: In this stage children are starting to socialise more. They begin to share ideas and follow certain rules in a game. They slowly learn the definition of teamwork. They get to engage in basic social skills and interests begin to lead social interactions.
UAE currency: the story behind the money in your pockets
TWISTERS
Director: Lee Isaac Chung
Starring: Glen Powell, Daisy Edgar-Jones, Anthony Ramos
Rating: 2.5/5
MATCH INFO
Uefa Champioons League semi-final, first leg:
Liverpool 5
Salah (35', 45 1'), Mane (56'), Firmino (61', 68')
Roma 2
Dzeko (81'), Perotti (85' pen)
Second leg: May 2, Stadio Olimpico, Rome
UAE currency: the story behind the money in your pockets
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Zayed Sustainability Prize
The specs
Engine: 2-litre or 3-litre 4Motion all-wheel-drive Power: 250Nm (2-litre); 340 (3-litre) Torque: 450Nm Transmission: 8-speed automatic Starting price: From Dh212,000 On sale: Now
COMPANY%20PROFILE
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Tips for newlyweds to better manage finances
All couples are unique and have to create a financial blueprint that is most suitable for their relationship, says Vijay Valecha, chief investment officer at Century Financial. He offers his top five tips for couples to better manage their finances.
Discuss your assets and debts: When married, it’s important to understand each other’s personal financial situation. It’s necessary to know upfront what each party brings to the table, as debts and assets affect spending habits and joint loan qualifications. Discussing all aspects of their finances as a couple prevents anyone from being blindsided later.
Decide on the financial/saving goals: Spouses should independently list their top goals and share their lists with one another to shape a joint plan. Writing down clear goals will help them determine how much to save each month, how much to put aside for short-term goals, and how they will reach their long-term financial goals.
Set a budget: A budget can keep the couple be mindful of their income and expenses. With a monthly budget, couples will know exactly how much they can spend in a category each month, how much they have to work with and what spending areas need to be evaluated.
Decide who manages what: When it comes to handling finances, it’s a good idea to decide who manages what. For example, one person might take on the day-to-day bills, while the other tackles long-term investments and retirement plans.
Money date nights: Talking about money should be a healthy, ongoing conversation and couples should not wait for something to go wrong. They should set time aside every month to talk about future financial decisions and see the progress they’ve made together towards accomplishing their goals.
