“IMF Announces USD 650 Billion SDR Allocation” by David Harkness – 7.17.21

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Entry Submitted by David Harkness at 7:27 PM EDT on July 17, 2021

On the 8 July 2021 the IMF announced the allocation of USD 650Billon to Special Drawing Rights (SDR)  the biggest allocation in the history of the IMF.

The Special Drawing Right (SDR) is an interest-bearing international reserve asset created by the IMF in 1969 to supplement other reserve assets of member countries.

The SDR is based on a basket of international currencies comprising the U.S. dollar, Japanese yen, euro, pound sterling and Chinese Renminbi. It is not a currency, nor a claim on the IMF, but is potentially a claim on freely usable currencies of IMF members. The value of the SDR is set daily by the IMF on the basis of fixed currency amounts of the currencies included in the SDR basket and the daily market exchange rates between the currencies included in the SDR basket.

SDRs are only allocated to IMF members that elect to participate in the SDR Department. Currently all members of the IMF are members of the SDR Department.

SDRs can be held and used by member countries, the IMF, and certain designated official entities called “prescribed holders” (see below)-but it cannot be held, for example, by private entities or individuals.

Only members that are not participants, non-members, and official entities may be prescribed as holders of SDRs under the Articles of Agreement. Currently there are 15 prescribed holders: four central banks (European Central Bank, Bank of Central African States, Central Bank of West African States, and Eastern Caribbean Central Bank); three intergovernmental monetary institutions (Bank for International Settlements, Latin American Reserve Fund, and Arab Monetary Fund); and eight development institutions (African Development Bank, African Development Fund, Asian Development Bank, International Bank for Reconstruction and Development and the International Development Association, Islamic Development Bank, Nordic Investment Bank, and International Fund for Agricultural Development).

See attached links and in particular  the rights of Vietnam to the existing SDR US $276.13M 

https://www.imf.org/en/News/Articles/2021/07/08/pr21208-imf-managing-director-kristalina-georgieva-executive-board-backing-new-us650b-sdr-allocation?utm_medium=email&utm_source=govdelivery

https://www.imf.org/en/Countries/VNM

Vietnam is  a member of the IMF along with Indonesia , Iraq  is not an approved member at this stage.

The allocation is expected to be finished by end of August 2021.

One would have to ask where are these funds are  coming from.

Is it possible the these funds are from the proceeds of the RV ,one  would expect so.

Kind regards,

David Harkness

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