# IMF should issue new reserves to help countries tackle overlapping crises – groups Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-10-07 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: IMF Urged to Issue $650B in Emergency Reserves Amid Global Meta Description: Civil society groups call for a new issuance of Special Drawing Rights to help countries facing multiple crises. World Bank warns of global recession risk. URL: https://financedigest.com/imf-should-issue-new-reserves-to-help-countries-tackle-overlapping-crises-groupshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-10-06t221941z2lynxmpei950jgrtroptp4argentina-economy-imf-1736815083905-compressed.jpg) By Andrea Shalal WASHINGTON (Reuters) -The International Monetary Fund should issue $650 billion in new emergency reserves to help its member countries grapple with overlapping health, food, energy and inflation crises, 140 civil society groups said in a letter to the IMF’s board on Thursday. IMF officials in July said a fresh issuance of Special Drawing Rights (SDR) reserves was among the options for aiding countries struggling with spillovers from Russia’s war in Ukraine, but there were no active discussions on the matter. The World Bank warned last month of the growing risk of a global recession as a result of the war, and said on Wednesday nearly 600 million people would still be [living in extreme poverty – with income of just $2.15 a day](https://www.financedigest.com/pensions-awareness-day-could-you-get-by-on-less-than-living-wage.html "Pensions Awareness Day: Could you get by on less than living wage? ") – by 2030. The groups’ plea for a second major SDR allocation in just over a [year comes as global finance officials](https://www.financedigest.com/hong-kong-finance-official-to-make-first-visit-to-britain-in-three-years.html "Hong Kong finance official to make first visit to Britain in three years") prepare to meet in Washington for the annual meetings of the IMF and World Bank. Similar [calls have come from lawmakers](https://www.financedigest.com/eu-lawmakers-call-for-summit-to-control-very-powerful-ai.html "EU lawmakers call for summit to control ‘very powerful’ AI") and business groups in recent months, although critics say a new issuance would also deliver fresh assets to Russia, which remains an IMF member. Backers [say in practice Russia](https://www.financedigest.com/renault-to-offload-its-stake-in-lada-maker-for-one-rouble-russia-says.html "Renault to offload its stake in Lada maker for one rouble, Russia says") would be hard pressed to find any country to swap its SDRs into hard currencies. Mark Plant, a former IMF official with the Center for Global Development, said it would be difficult to win the 85% approval needed for another allocation given deep frustration that the [Group of 20 major economies had not met their commitment to recycle $100 billion](https://www.financedigest.com/telecoms-group-orange-signs-sustainability-linked-refinancing-of-6-billion-euros-syndicated-credit-facility.html "Telecoms group Orange signs sustainability-linked refinancing of 6 billion euros syndicated credit facility") of their SDRs from the last one. The IMF in August 2021 created and issued $650 billion in SDR assets to member countries to aid their recovery from the [COVID-19 pandemic](https://www.financedigest.com/pandemic-restrictions-that-hampered-the-circulation-of-viruses-other-than-covid-19.html "Pandemic restrictions that hampered the circulation of viruses other than COVID-19"), but poor countries are clamoring for more funds due to high inflation and a mounting debt crisis. The letter, signed by Action Corps, Arab Watch Coalition, Center for Economic and Policy Research and other [groups from around](https://www.financedigest.com/virtual-accounts-leading-payment-expert-calls-for-major-changes-in-wolfsberg-group-guidance-around-on-behalf-of-payments.html "Virtual Accounts: leading payment expert calls for major changes in Wolfsberg Group guidance around “On behalf of” payments") the world, said over 100 countries had used last year’s SDR allocation in the first year. Those [countries needed](https://www.financedigest.com/5-countries-you-need-to-have-an-offshore-account-in.html "5 Countries You Need To Have An Offshore Account In") more funds since they were struggling with the ongoing COVID-19 pandemic, soaring food and energy costs due to the war in Ukraine, climate disasters and high debt levels, the letter said. They said 42 countries had exchanged their SDRs for hard currencies valued at $16 billion, and 69 countries used SDRS [worth $80 billion](https://www.financedigest.com/why-a-quiet-revolution-in-the-cloud-is-worth-billions.html "Why A Quiet Revolution In The Cloud Is Worth Billions") in their budgets or for other fiscal purposes. The non-partisan One Campaign, which tracks SDR pledges, said only $60 [billion in pledges](https://www.financedigest.com/nestle-pledges-1-billion-to-coffee-sustainability-plan.html "Nestle pledges billion to coffee sustainability plan") had been made thus far, with several countries – including Ireland, Norway, Switzerland and Sweden – having failed to make any pledges. Sara Harcourt, senior policy director for [development finance](https://www.financedigest.com/bridging-finance-for-property-development.html "Bridging Finance for Property Development") at the ONE Campaign, said it was shocking that so little progress has been made toward the $100 billion target. “It’s like there’s a fire burning and the people in charge of the sprinklers aren’t using them,” she said. (Reporting by Andrea Shalal; editing by Richard Pullin and Richard Chang) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---