IMF Allocates $3.35bn To Nigeria

Nigeria has been allocated about $3.35 billion as part of a historic general allocation of Special Drawing Rights (SDRs) of the International Monetary Fund (IMF).

This is following the approval of a general allocation of about SDR456 billion, an equivalent of $650 billion, by the IMF Board of Governors on Monday.

The allocation is targeted at boosting global liquidity at a time when the world is grappling with the coronavirus (COVID-19) pandemic.

According to IMF managing director, Kristalina Georgieva, “This is a historic decision – the largest SDR allocation in the history of the IMF and a shot in the arm for the global economy at a time of unprecedented crisis”.

Although it is not a currency, the SDR is an international reserve asset created by the IMF to supplement the official reserves of its member countries.

It is a potential claim on the freely usable currencies of IMF members and can provide a country with liquidity. The SDR is defined by the US dollar, Euro, Chinese Yuan, Japanese Yen, and the British Pound.

The amount allocated to Nigeria is as a result of the exchange rate of reference which is 0.702283 SDR to a dollar as of July 1, 2021, and Nigeria has 2.4545 billion SDRs.

“The SDR allocation will benefit all members, address the long-term global need for reserves, build confidence, and foster the resilience and stability of the global economy,” the IMF managing director added.

“It will particularly help our most vulnerable countries struggling to cope with the impact of the COVID-19 crisis.”

Georgieva promised that the fund would continue to engage actively with its membership to identify viable options for voluntary channelling of SDRs from wealthier to poorer, and more vulnerable member countries to support their pandemic recovery and achieve resilient and sustainable growth.