Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), made the following statement today regarding the Executive Board's decision to endorse the general allocation of Derechos Especiales de Giro (DEG).

The allocation of DEG will strengthen the liquidity and reserves of all our member countries, bolster confidence, and promote resilience and stability in the global economy. In 2009, an DEG allocation contributed significantly to the recovery from the global financial crisis, and I am confident that this new allocation will produce similar benefits.

It will help all IMF member countries, particularly vulnerable countries, and strengthen their response to the Covid-19 crisis.

Under the IMF's Articles of Agreement, the managing Director may propose a DEG allocation if she believes that it would help meet a long-term global need to supplement existing reserve assets so as to avoid the occurrence of both economic stagnation and deflation and excessive demand and inflation, and if there is broad support among the membership for the allocation.

Once the Executive Board has concurred with the Managing Director's proposal, the proposal is submitted for consideration by the Board of Governors, whose decision to approve an DEG allocation requires the support of members representing an 85 percent majority of the total voting power of the members participating in the DEG Department (currently, all IMF members). DEG allocations are distributed among IMF member countries in proportion to their relative quotas in the IMF.

"Yesterday, the IMF Executive Board expressed its agreement with my proposal for a new general DEG allocation equivalent to $650 billion-the largest in the IMF's history-to address global reserve needs during the worst crisis since the Great Depression. I will now submit this proposal to the IMF Board of Governors for its consideration and approval. Our expectation is that, if approved, the SDR allocation will be implemented by the end of august", said Kristalina Georgieva, managing Director of the International Monetary Fund (IMF).