The consequences of Covid-19 pandemic posed financial challenges to many countries around the world. In efforts to help member countries come out of the crisis and promote their financial stability, the International Monetary Fund (IMF) approved a new procedure for the distribution of Special Drawing Rights (SDR’s), redistributing USD 650 billion (approximately SDR 456 billion) between countries.
The said redistribution of SDR’s came into force on August 23 of the current year. Of the USD 650 billion, about USD 275 billion (approximately SDR 193 billion) was invested in emerging economies, including low-income countries. Georgia received 202 million SDRs in this distribution, equivalent to about USD 286 million, as reflected in Georgia's official international reserves statistics published today.
Boosting the level of international reserves, the transaction makes Georgia more financially resilient against the crisis. With the SDRs available to it, the country uses less of the expensive domestic or foreign borrowing to replenish international reserves. The SDR’s are unconditional liability to the country, and are recorded in the Balance of Payments as reserve assets on the one hand, and also as long-term liabilities on the other.
This distribution of SDRs is an illustration of the considerable support of International Monetary Fund to member countries as they strive to overcome the current pandemic situation and face the global crisis. Such distributions are considered to be significant contributors to the global financial stability.
The IMF offered a similar distribution back in 2009, in the amount of SDR equivalent of USD 250 billion, to help member countries emerge from the 2008 global financial crisis. Georgia received 144 million SDRs (equivalent to USD 225.5 million) during that round of allocation.
