SEVILLE, Spain – Spain will redirect an additional $1.9 billion in Special Drawing Rights to the International Monetary Fund as part of an effort to support developing countries, Economy Minister Carlos Cuerpo told Reuters on Tuesday.
Speaking on the sidelines of a UN conference on development financing in Seville, Cuerpo said Spain has committed to shifting up to 50% of its SDRs, or over 5.5 billion euros ($6.5 billion), showcasing the country’s dedication to contributing to global economic stability and development.
SDRs are international reserve assets created by the IMF to supplement member countries’ official reserves, providing liquidity to the global economy. They are allocated to member countries in proportion to their IMF quotas and can be exchanged among governments for freely usable currencies in times of need.
“Spain will always be part of the solution, for example, with the commitment to re-channel most of our SDRs … that would benefit developing countries,” Cuerpo said.
The additional funds will go into the IMF’s Poverty Reduction and Growth Trust, which is used to provide concessional loans to poor countries.
Spain’s move aligns with broader efforts among donors to support countries in need, if with the notable absence of the United States after Washington refused to back the summit’s plan of action hammered out over the last year.
The pre-summit “outcomes” agreement included tripling multilateral lending capacity, debt relief, a push to boost tax-to-GDP ratios to at least 15%, and shifting the special IMF money to countries that need it most. – Reuters
