6 May 2022 10:42

IMF considering mechanism of transferring 10% of unused SDRs to Ukraine - minister

KYIV. May 6 (Interfax-Ukraine) - The International Monetary Fund (IMF) is considering a convenient mechanism of transferring 10% of unused Special Drawing Rights (SDRs) to Ukraine and believes this can be done, Ukrainian Finance Minister Serhiy Marchenko said.

"IMF Managing Director Kristalina Georgieva is working with a Fund team on technicalities of a mechanism to be convenient for all countries, so that they could use this option. I mean the IMF has faith in this option and deems it to be possible," Marchenko said on Friday.

It could be a collective action, so to say, of all countries on earth, in support of Ukraine, he said.

"They are working on it. Hopefully, such a mechanism will be designed. Yet there are certain specifics. For instance, the EU has a legislative ban on funding a budget deficit with such instruments. So, that may require respective regulation in the EU. But, in principle, this is an effective mechanism. We believe this can be done," Marchenko said.

There are undistributed SDRs in the world's biggest economies, including Australia, Austria, Canada, France, Germany, Italy, Japan, the UK and the United States, the minister said, adding this is a matter of tens or hundreds of millions of dollars.

European Council President Charles Michel supported the transfer of 10% of unused SDRs to Ukraine on condition that the decision would be made by each EU member state at the national level.

The IMF distributed SDRs equivalent to $650 billion in August 2021, and Ukraine acquired over $2.7 billion (SDR1.9 billion) consistent with its quota. Ukraine spent the funds as of February 24. Marchenko called on G20 members in April to transfer 10% of their unused SDRs to Kyiv.