The Executive Board of the International Monetary Fund (IMF) is on June 25 set to discuss a proposal that would see Caribbean member countries benefiting from as much as US$2.4 billion in additional liquidity support under the entity’s newly proposed US$650-billion Special Drawing Rights (SDR) allocation.

The overall provision is aimed at assisting in the global recovery from the economic fallout caused by the more than year-old COVID-19 pandemic, by supplementing the reserve assets of the IMF’s 190-member countries.

Nigel Chalk, acting director of the IMF’s Western Hemisphere Department, said if the Executive Board approves the submission it will go the Board of Governors for ratification and, with 85 per cent of the members’ votes it would become effective before September.

Chalk was addressing a webinar under the theme ‘Reimagining Caribbean Economies in the Wake of the COVID-19 Pandemic’, on Thursday (June 17), which was one of the events under the Caribbean Development Bank’s 51st Annual Meeting which got under way June 15 and ends July 1.

According the IMF official, allocations under the proposed SDR provision would be distributed in line with each IMF member country’s quota share and that, for the Caribbean, this would amount to around US$2.4 billion.

“Members with liquidity constraints will be able to use this allocation to smooth the needed adjustment and avoid distortionary policies, and it would provide scope for spending on crisis, response and resiliency efforts. Once approved, this allocation will address the long-term global need to supplement existing reserve assets,” he informed.

Additionally, Chalk said the provision would help instil global confidence, “while sending a powerful signal of a cooperative multilateral response”.