IMF will grant Yemen $665 million in special drawing rights, according to the statements of the regional representative of the Fund for Yemen, Ghazi Al-Shbeikat.
This will contribute to alleviating the severe economic and humanitarian crisis in Yemen, resulting from the ongoing war.
“Today, IMF member countries receive their shares of the new $650 billion #SDRs allocation—the largest in history!” said Kristalina Georgieva, IMF’s Managing Director said in a tweet
She called on these countries to use these allocations in a responsible and wise manner, in the interest of all citizens.
IMF’s Board of Governors had agreed to provide the largest support in its history to the equivalent of $650 billion in Special Drawing Rights units (456 billion units), to help countries deal with the growing repercussions resulting from the COVID-19 pandemic.
Al-Shabikat indicated that the SDR allocation will boost Yemen’s hard currency reserves by more than 70%, and provide support to a much-needed country to face the crisis, including the population’s urgent food and medical needs.
The battles between the Saudi-led coalition and the Iranian-backed Houthis for more than six years have exhausted foreign exchange reserves in Yemen, which imports most of its goods.
More than 80% of the population depends on aid.
To be able to spend the SDR, countries must exchange them for a hard currency, and this requires finding a country willing to participate in the swap.
SDRs it is an international reserve asset created by IMF in 1969 to be a supplement to the official reserves of its member countries.
The total amount of allocations distributed so far is 660.7 billion units (equivalent to $943 billion).
The value of the SDRs is determined according to a basket of five currencies: the US dollar, the euro, the Chinese yuan, the Japanese yen, and the British pound.
IMF is a specialized agency of the Bretton Woods system of the United Nations, established by an international treaty in 1944 to work to promote the health of the global economy.
The Fund is headquartered in Washington, D.C., and is managed by its 189 members who include nearly every country in the world.