The head of the IMF sees “a high degree of uncertainty” in the global outlook

WASHINGTON (Reuters) – The head of the International Monetary Fund said Monday the global lender needed more resources to help heavily indebted countries, citing a highly uncertain global economic outlook and growing divergence between rich and poor countries.

IMF Managing Director Kristalina Georgieva, who has long advocated a new allocation of the IMF’s own currency, Special Drawing Rights (SDRs), said doing so now would provide more funding for use both the economic crisis and health and would accelerate movements towards a digital system and green economy.

Under outgoing President Donald Trump, the United States, the IMF’s largest shareholder, has blocked a new SDR allocation, an action similar to that of a central bank that prints money, as it would provide more resources to more countries. rich, as the allocation would be proportional to their share.

Swedish Finance Minister Magdalena Andersson, the new chair of the IMF’s steering committee, who spoke at an online press conference with Georgieva, said it was clear that the need for liquidity remained high and would consult countries. members on options to expand liquidity.

Andersson, the first European to head the International Monetary and Financial Committee in more than a dozen years and the first women, began her three-year term here on Monday.

Georgieva said the IMF quickly increased concessional financing to emerging and developing economies, including member countries by donating about $ 20 billion in existing SDRs. This would continue to play an important role, but other steps were needed, he said.

“It will continue to be so important, even more important, so that we can expand our capacity to support countries that have lagged behind,” Georgieva said.

He said IMF members had never taken a new SDR allocation off the table, adding that some members continued to discuss it as a possible measure. A possible sale of gold from IMF reserves would have “some opportunity costs” for the IMF, but would depend on members, he said.

He said he hoped the group of the top 20 economies would extend the current moratorium on official debt service payments from poorer countries, which will now end in June, but will depend heavily on the pace of vaccinations in the coming months.