IMF OKs Big Increase in Funds          08/03 06:04

   The governing body of the International Monetary Fund has approved a $650 
billion expansion in the agency's resources to support economically vulnerable 
countries battling the coronavirus pandemic and the economic downturn it has 
caused.

   WASHINGTON (AP) -- The governing body of the International Monetary Fund has 
approved a $650 billion expansion in the agency's resources to support 
economically vulnerable countries battling the coronavirus pandemic and the 
economic downturn it has caused.

   The 190-nation lending institution said Monday that its board of governors 
approved the expansion of its reserves known as Special Drawing Rights, the 
largest increase in the institution's history.

   "This is a historic decision ... and a shot in the arm for the global 
economy at a time of unprecedented crisis," IMF Managing Director Kristalina 
Georgieva said. "It will particularly help our most vulnerable countries 
struggling to cope with the impact of the COVID-19 crisis."

   The general allocation of SDRs will become effective on Aug. 23. The IMF 
said that the new reserves will be credited to IMF member countries in 
proportion to their existing quotas with the agency. About $275 billion of the 
new allocation will go to the world's poorer countries.

   The agency is also looking into ways richer countries could voluntarily 
channel SDRs to poorer countries, the agency said.

   The big boost in IMF resources had been rejected by the Trump 
administration. But after President Joe Biden took office in January, Treasury 
Secretary Janet Yellen threw her support behind the proposal.

   Many Republican members of Congress objected to the SDR increase, saying 
that the expanded IMF resources would benefit U.S. adversaries such as China, 
Russia and Iran. However, the increase in resources was strongly supported by 
international relief agencies.