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Nigeria to Get $3.35bn as IMF allocation comes

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Nigeria To Get $3.35bn As IMF $650bn SDR Allocation Comes Into Effect

The largest allocation of Spe­cial Drawing Rights (SDRs) in history—about $650 billion— came into effect on Monday, according to Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund.

She said in a statement that the allocation is a significant shot in the arm for the world and, if used wisely, a unique opportunity to combat this unprecedented crisis.

The Washington-based in­stitution had disclosed that Ni­geria would be allocated about $3.35 billion out of the sum.

“The SDR allocation will provide additional liquidity to the global economic system – supplementing countries’ foreign exchange reserves and reducing their reliance on more expensive domestic or external debt. Countries can use the space provided by the SDR allocation to support their economies and step up their fight against the crisis.

“SDRs are being distribut­ed to countries in proportion to their quota shares in the IMF. This means about US$275 billion is going to emerging and developing countries, of which low-income countries will receive about US$21 bil­lion – equivalent to as much as 6 percent of GDP in some cases.

“SDRs are a precious re­source and the decision on how best to use them rests with our member countries. For SDRs to be deployed for the maximum benefit of member countries and the global econ­omy, those decisions should be prudent and well-informed.

“To support countries, and help ensure transparency and accountability, the IMF is pro­viding a framework for assess­ing the macroeconomic impli­cations of the new allocation, its statistical treatment and governance, and how it might affect debt sustainability. The IMF will also provide regular updates on all SDR holdings, transactions, and trading – in­cluding a follow-up report on the use of SDRs in two years’ time.

“To magnify the benefits of this allocation, the IMF is encouraging voluntary chan­neling of some SDRs from countries with strong external positions to countries most in need.”

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