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Has the IMF’s 2021 general SDR allocation been useful? For what and for whom?

In the face of the COVID-19 crisis, the International Monetary Fund (IMF) took unprecedented measures including, in 2021, an historical SDR allocation to cover long-term global reserve needs and ultimately support vulnerable countries. Since the allocation members have held most of the allocated SDRs as reserves, but emerging economies and low-income countries have used them to service their debts with the IMF and (primarily) to exchange for currencies. Those funds have mainly been used for budgetary purposes in the face of the food and energy crisis triggered by the war in Ukraine. Furthermore, in line with the G20’s objective to channel USD 100 bn of SDRs to vulnerable countries, members with sound economic positions have lent some of their SDRs to IMF trusts. This partly offsets the fact that countries that needed the allocated SDRs most received less. […]