Policy support, COVID-19 vaccination differences causing uneven recovery: IMF governing committee

Finance Minister Nirmala Sitharaman backs call for voluntary SDR deployment to poorer countries.

The International Monetary and Finance Committee (IMFC), which directs the International Monetary Fund (IMF) and sets its agenda, met as part of the annual meetings of the IMF and World Bank in Washington DC on October 14. Finance Ministers and central bankers, who constitute the committee, including Finance Minister Nirmala Sitharaman, were present. A communique issued by the IMFC noted that while the world economy is recovering from the pandemic, divergences exist between different economies driven by differences in vaccine availability and different levels of policy support.

The IMFC also welcomed the new SDR (Special Drawing Rights) allocation of reserve assets of the IMF, $650 billion of which were newly created in 2021. The IMFC also backed the creation of a trust — the Resilience and Sustainability Trust, first announced in June — to channel some of this money to low income and vulnerable middle income countries, hit by the COVID-19 pandemic. Ms. Sitharaman called on the IMF to provide these countries with the necessary policy support for effective use of SDRs allocated recently, the Finance Ministry tweeted. The IMFC supported the voluntary channelling of SDRs from countries with strong positions to those in need — a position echoed by Ms. Sitharaman, according to the Finance Ministry.