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 on Monday that the global lender needs more resources to help heavily indebted countries, citing a highly uncertain global economic outlook and growing divergence between rich and poor.

IMF Managing Director Kristalina Georgieva, who has long backed a new allocation of the IMF’s own currency, Special Drawing Rights (SDRs), said this would provide more funding to address both the health crisis and and the economic crisis and will accelerate the transition to a digital system. and the green economy.

Under President Donald Trump, the US, the IMF’s largest shareholder, has blocked such a new SDR allocation, a move similar to a central bank that prints money because it would provide more resources to richer countries because the allocation would be commensurate with shareholders.

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 that it would consult with member countries with on options for extending liquidity.

Andersson, the first European to chair the International Monetary and Financial Committee in more than 12 years and the first women, began her three-year term here on Monday.

Georgieva said the IMF has rapidly increased concessional financing to emerging markets and developing economies, including through donations by member countries of about $ 20 billion in existing SDRs. It will continue to play an important role, but further steps were needed, she said.

“It will continue to be so important, and more important, for us to be able to expand our capacity to support lagging countries,” Georgieva said.

She said a new SDR allocation was never removed from the table by IMF members, she said, adding that some members continued to discuss it as a possible move. A possible sale of gold from IMF reserves would have “some opportunity costs” for the IMF, but it would depend on the members, she said.

She said the Group of 20 major economies is expected to extend the current moratorium on official debt payments by the poorest countries, which is due to end in June, but much will depend on the pace of vaccinations in the coming months.