This archive report was first published on 25 August 2021.
On August 23, 2021, the International Monetary Fund (IMF) announced a $650 billion allocation of special drawing rights (SDRs), its largest allocation in history, to combat the COVID-19 crisis.
Kenya is among the countries that will benefit from this allocation, receiving $737.6 million in SDRs.
According to the IMF, this allocation is part of $275 billion going to emerging and developing countries, with low-income countries receiving about $21 billion – equivalent to 6% of GDP in some cases.
SDRs are distributed to countries in proportion to their quota shares in the IMF and are an international reserve asset created to supplement the official reserves of its member countries.
As Managing Director of the IMF, Kristalina Georgieva stated, 'This allocation is a significant shot in the arm for the world and, if used wisely, a unique opportunity to combat this unprecedented crisis.'
The SDR allocation will provide additional liquidity to the global economic system, supplementing countries' foreign exchange reserves and reducing their reliance on more expensive domestic or external debt.
