The International Monetary Fund’s allocation of a record $650 billion in reserve assets in 2021 has benefitted the global economy and helped some emerging and developing economies recover from the pandemic-driven slowdown.
The Washington-based lender's special drawing rights (SDRs), an international reserve currency, has helped IMF member countries to meet their long-term liquidity needs and reduced “sovereign risk” in emerging market and developing countries (EMDC), the fund said.
SDRs are the IMF’s unit of exchange 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. They are an accounting unit for IMF transactions with central banks and a stable asset in the international reserves of member countries.
“It also contributed to global financial stability by limiting spillovers. Some EMDCs used the allocation to meet fiscal and external needs, including [those] related to the pandemic,” the IMF said.
The SDR allocation increased gross and in most cases net, international reserves at a time of “unusual uncertainty and stress in the global economy”.
Although the bulk of the allocation went to advanced economies around the world, in line with members’ respective quota shares, the allocation as a share of GDP was larger in low-income countries than in emerging and developed economies.
The share of EMDCs was about 42.2 per cent in the IMF quota, which meant about $275 billion of SDR allocations went to emerging and developing countries. Low-income countries received about $21 billion of that amount, with allocation amounting to as much as 6 per cent of a country's GDP in some cases, the IMF data at the time showed.
The IMF board approved the allocation in August 2021. The programme was the biggest in the fund's 77-year history and was billed as a vital step to help grow global liquidity, at a time when nations across the globe were trying to accelerate growth momentum and break the economic shackles of the pandemic.
The fund had taken similar measures, although at a much smaller scale, in 2009 when it distributed $250 billion in SDR reserves to member countries amid the global financial crisis.
As well as supporting reserves, the SDR allocation helped in lowering borrowing costs, particularly for credit-constrained emerging and developing nations.
“The SDR allocation was less costly than borrowing from markets at the time of implementation and provided rapid, unconditional liquidity to all members, including non-market access LICs [lower-income countries], without contributing to global imbalances or posing immediate rollover risk,” the IMF said.
The allocation did not delay the needed macroeconomic adjustment, as well as reforms in a majority of emerging markets and developing countries, “with some exceptions”, the IMF said.
“It also did not systematically exacerbate fiscal dominance or impact central bank independence. However, for some EMDCs, particularly LICs, the allocation was seen as having led to some delays, underscoring the need for continued monitoring and policy advice,” the fund added.
The funding programme did not have a material effect on global inflation.
It represented only a small fraction – less than 0.5 per cent – of total global broad money in 2021 and was “implemented when the global output gap was large and negative”.
“Only about 5 per cent of the total allocation was exchanged into freely usable currencies,” the fund said.
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Friday's schedule in Madrid
Men's quarter-finals
Novak Djokivic (1) v Marin Cilic (9) from 2pm UAE time
Roger Federer (4) v Dominic Thiem (5) from 7pm
Stefanos Tsitsipas (8) v Alexander Zverev (3) from 9.30pm
Stan Wawrinka v Rafael Nadal (2) from 11.30pm
Women's semi-finals
Belinda Bencic v Simona Halep (3) from 4.30pm
Sloane Stephens (8) v Kiki Bertens (7) from 10pm
Fines for littering
In Dubai:
Dh200 for littering or spitting in the Dubai Metro
Dh500 for throwing cigarette butts or chewing gum on the floor, or littering from a vehicle.
Dh1,000 for littering on a beach, spitting in public places, throwing a cigarette butt from a vehicle
In Sharjah and other emirates
Dh500 for littering - including cigarette butts and chewing gum - in public places and beaches in Sharjah
Dh2,000 for littering in Sharjah deserts
Dh500 for littering from a vehicle in Ras Al Khaimah
Dh1,000 for littering from a car in Abu Dhabi
Dh1,000 to Dh100,000 for dumping waste in residential or public areas in Al Ain
Dh10,000 for littering at Ajman's beaches
What is a black hole?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
West Indies v England ODI series:
West Indies squad: Jason Holder (c), Fabian Allen, Devendra Bishoo, Darren Bravo, Chris Gayle, Shimron Hetmyer, Shai Hope, Evin Lewis, Ashley Nurse, Keemo Paul, Nicholas Pooran, Rovman Powell, Kemar Roach, Oshane Thomas.
Fixtures:
1st ODI - February 20, Bridgetown
2nd ODI - February 22, Bridgetown
3rd ODI - February 25, St George's
4th ODI - February 27, St George's
5th ODI - March 2, Gros Islet
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Scoreline:
Cardiff City 0
Liverpool 2
Wijnaldum 57', Milner 81' (pen)
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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Third Test
Result: India won by 203 runs
Series: England lead five-match series 2-1
Points classification after Stage 4
1. Arnaud Demare (France / FDJ) 124
2. Marcel Kittel (Germany / Quick-Step) 81
3. Michael Matthews (Australia / Sunweb) 66
4. Andre Greipel (Germany / Lotto) 63
5. Alexander Kristoff (Norway / Katusha) 43
BUNDESLIGA FIXTURES
(All games 4-3pm kick UAE time) Bayern Munich v Augsburg, Borussia Dortmund v Bayer Leverkusen, Hoffenheim v Hertha Berlin, Wolfsburg v Mainz , Eintracht Frankfurt v Freiburg, Union Berlin v RB Leipzig, Cologne v Schalke , Werder Bremen v Borussia Monchengladbach, Stuttgart v Arminia Bielefeld
Tewellah by Nawal Zoghbi is out now.
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
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Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
