Special Drawing Rights (SDRs) and the COVID-19 crisis
The coronavirus disease (COVID-19) pandemic is the worst global crisis since the Second World War, with developing countries suffering more devastating economic and social effects than developed countries. Governments’ increased pandemic-related expenditure combined with the drastic fall in tax reve...
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ECLAC
2022
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| Acceso en línea: | https://hdl.handle.net/11362/47856 |
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cepal-11362-47856 Special Drawing Rights (SDRs) and the COVID-19 crisis NU. CEPAL NU. ECA DIVISAS RESERVAS MONETARIAS MERCADOS DE CAPITAL PAISES DESARROLLADOS PAISES EN DESARROLLO FINANCIACION DEL DESARROLLO COVID-19 VIRUS PANDEMIAS ASPECTOS ECONOMICOS POLITICA FISCAL MACROECONOMIA FOREIGN EXCHANGE MONETARY RESERVES CAPITAL MARKETS DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPMENT FINANCE COVID-19 VIRUSES ECONOMIC ASPECTS FISCAL POLICY MACROECONOMICS PANDEMICS The coronavirus disease (COVID-19) pandemic is the worst global crisis since the Second World War, with developing countries suffering more devastating economic and social effects than developed countries. Governments’ increased pandemic-related expenditure combined with the drastic fall in tax revenues have increased their fiscal deficits and heightened their debt vulnerabilities. The generalized increase in fiscal imbalances and indebtedness has given rise to greater liquidity needs across developing countries, despite considerable heterogeneity in their fiscal positions and debt profiles. Easing liquidity constraints and expanding fiscal space for all developing countries requires alternative mechanisms in addition to existing credit facilities. The new general allocation of US$ 650 billion in Special Drawing Rights (SDRs) implemented on 23 August 2021 provided the most expedient mechanism to provide concessional liquidity at scale to all countries regardless of their level of income. Aside from its agility and financial effects, SDRs are the only democratic device to enhance policy space in developing economies, as it comes with no conditionalities. „ SDRs have several advantages over other IMF credit facilities and financing lines, including the fact that they do not generate debt, have a very low cost of use, and can reduce the risk premium for highly indebted countries. The new issuance of SDRs can help boost the level of international reserves of developing economies, strengthen their external positions, reduce their liquidity and default risk, and free up resources to meet the Sustainable Development Goals (SDGs). Key messages .-- A. The pandemic and developing countries’ financing needs .-- B. SDRs and their advantages .-- C. Recipient countries of the SDR allocation .-- D. Determining the value of SDRs to be reallocated from developed to developing countries (low-and middle-income countries) .-- E. Proposed means of reallocating SDRs .-- F. Conclusion. 2022-04-25T12:57:12Z 2022-04-25T12:57:12Z 2022-04-25 Texto Documento Completo https://hdl.handle.net/11362/47856 en .pdf application/pdf AMERICA LATINA Y EL CARIBE LATIN AMERICA AND THE CARIBBEAN ECLAC |
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Cepal |
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Libros Digitales Cepal |
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Sistema Integrado de Documentación |
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Libros Digitales Cepal |
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Libro en línea |
| title |
Special Drawing Rights (SDRs) and the COVID-19 crisis |
| spellingShingle |
Special Drawing Rights (SDRs) and the COVID-19 crisis DIVISAS RESERVAS MONETARIAS MERCADOS DE CAPITAL PAISES DESARROLLADOS PAISES EN DESARROLLO FINANCIACION DEL DESARROLLO COVID-19 VIRUS PANDEMIAS ASPECTOS ECONOMICOS POLITICA FISCAL MACROECONOMIA FOREIGN EXCHANGE MONETARY RESERVES CAPITAL MARKETS DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPMENT FINANCE COVID-19 VIRUSES ECONOMIC ASPECTS FISCAL POLICY MACROECONOMICS PANDEMICS |
| title_short |
Special Drawing Rights (SDRs) and the COVID-19 crisis |
| title_full |
Special Drawing Rights (SDRs) and the COVID-19 crisis |
| title_fullStr |
Special Drawing Rights (SDRs) and the COVID-19 crisis |
| title_full_unstemmed |
Special Drawing Rights (SDRs) and the COVID-19 crisis |
| title_sort |
special drawing rights (sdrs) and the covid-19 crisis |
| topic |
DIVISAS RESERVAS MONETARIAS MERCADOS DE CAPITAL PAISES DESARROLLADOS PAISES EN DESARROLLO FINANCIACION DEL DESARROLLO COVID-19 VIRUS PANDEMIAS ASPECTOS ECONOMICOS POLITICA FISCAL MACROECONOMIA FOREIGN EXCHANGE MONETARY RESERVES CAPITAL MARKETS DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPMENT FINANCE COVID-19 VIRUSES ECONOMIC ASPECTS FISCAL POLICY MACROECONOMICS PANDEMICS |
| description |
The coronavirus disease (COVID-19) pandemic is the worst global crisis since the Second World War, with developing countries suffering more devastating economic and social effects than developed countries. Governments’ increased pandemic-related expenditure combined with the drastic fall in tax revenues have increased their fiscal deficits and heightened their debt vulnerabilities. The generalized increase in fiscal imbalances and indebtedness has given rise to greater liquidity needs across developing countries, despite considerable heterogeneity in their fiscal positions and debt profiles.
Easing liquidity constraints and expanding fiscal space for all developing countries requires alternative mechanisms in addition to existing credit facilities. The new general allocation of US$ 650 billion in Special Drawing Rights (SDRs) implemented on 23 August 2021 provided the most expedient mechanism to provide concessional liquidity at scale to all countries regardless of their level of income. Aside from its agility and financial effects, SDRs are the only democratic device to enhance policy space in developing economies, as it comes with no conditionalities. „ SDRs have several advantages over other IMF credit facilities and financing lines, including the fact that they do not generate debt, have a very low cost of use, and can reduce the risk premium for highly indebted countries. The new issuance of SDRs can help boost the level of international reserves of developing economies, strengthen their external positions, reduce their liquidity and default risk, and free up resources to meet the Sustainable Development Goals (SDGs). |
| publisher |
ECLAC |
| publishDate |
2022 |
| url |
https://hdl.handle.net/11362/47856 |
| _version_ |
1764118978252242944 |
