U.S. Democrats ask Yellen to back $2 trillion IMF emergency funds for
pandemic abroad
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[November 24, 2021]
By Andrea Shalal
WASHINGTON (Reuters) - Four groups of
influential Democratic lawmakers urged U.S. Treasury Secretary Janet
Yellen on Tuesday to back the issuance of $2 trillion in additional
emergency reserves by the International Monetary Fund to help poor
countries still struggling with the COVID-19 pandemic.
The chairs of the Congressional Progressive, Black, Hispanic, and Asian
Pacific American Caucuses told Yellen in a letter seen by Reuters that
U.S. backing for a new allocation of IMF reserves would provide needed
support for hundreds of millions of people in developing countries,
where vaccination rates lag far behind those in advanced economies,
while underpinning global growth.
In the letter the lawmakers welcomed Yellen's support for a $650 billion
allocation of IMF Special Drawing Rights (SDRs) in August, and asked her
to support a measure passed by the House of Representatives in July that
called for issuance of 1.5 trillion more SDRs, valued at around $2
trillion.
"A new issuance of 1.5 trillion SDRs remains a vital tool for this
administration’s efforts to crush the coronavirus and build back better,
both at home and abroad," they wrote.
A congressional aide said "aggressive action" was needed to address the
pandemic's global impacts, particularly for low-income countries, and
the caucuses want to ensure support from President Joe Biden's
administration for additional SDRs, given "the potential to advance
racial justice."
The lawmakers' letter said that this year's IMF SDR allocation had been
used in full by many of the world's most vulnerable countries, including
Chad, Lebanon, Ecuador, Malawi, Tunisia and Ethiopia.
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Treasury Secretary Janet Yellen attends the House Financial Services
Committee hearing in Washington, U.S., September 30, 2021. Al Drago/Pool
via REUTERS
The amount of SDRs used in the three months since the
issuance was 21 times greater than what had been used in the first
three months after the last issuance in 2009, they said.
Lawmakers are seeking Yellen's support as they work to finalize
appropriations for the coming fiscal year. The House measure must
still be passed by the Senate.
The IMF has estimated that developing countries will need some $2.5
trillion to cover their financing needs in the wake of the pandemic
and the economic disruption it has caused.
The August issuance was the IMF's largest-ever distribution of
monetary reserves, providing additional liquidity for the global
economy, supplementing member countries’ foreign exchange reserves
and reducing their reliance on external debt.
(Reporting by Andrea Shalal; editing by Grant McCool)
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