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US opposes massive liquidity IMF boost: Steven Mnuchin

The move was first floated by IMF Managing Director Kristalina Georgieva last month and is supported by many finance ministers, prominent economists and non-profit groups.

April 16, 2020 / 08:33 PM IST

The United States opposes creation of liquidity through issuance of the International Monetary Fund's Special Drawing Rights (SDRs) as part of the response to the coronavirus pandemic, US Treasury Secretary Steven Mnuchin said on Thursday.

In a statement to the IMF's steering committee, Mnuchin said 70% of the funds created through an SDR allocation, something akin to a central bank "printing" new money, would go to G20 countries, most of whom did not need it, while only 3% would go to low-income countries.

The 24-member International Monetary and Financial Committee is meeting on Thursday to review the IMF's response to the pandemic and a possible SDR allocation that could provide hundreds of billions of dollars in urgently needed foreign exchange reserves for all of the IMF's 189 members.

The move was first floated by IMF Managing Director Kristalina Georgieva last month and is supported by many finance ministers, prominent economists and non-profit groups. But Washington, the IMF's dominant shareholder, is blocking an allocation because it would give new avenues of funding for Iran and China, Reuters reported this week.