The International Monetary Fund (IMF) on Monday deposited $665 million at the Yemeni Central Bank to help ease an acute economic and humanitarian crisis in the war-torn country.
The fund’s regional representative for Yemen Gazi Shbaikat told Asharq Al-Awsat that the allocation will boost Yemen’s foreign exchange reserves by over 70 percent, providing much needed support to help address the crisis, including with the many urgent food and medical needs of the population.
The allocation comes after IMF Governors approved early this month a general allocation of Special Drawing Rights (SDRs) - the fund’s unit of exchange backed by dollars, euros, yen, sterling and yuan – to a number of its countries.
Shbaikat said the SDRs allocating is considered a tool to support the foreign exchange reserves of the IMF’s 190 member countries in proportion to their existing quotas in the Fund.
He said that last August 2, the Board of Governors of the IMF has approved a general allocation of SDRs equivalent to $650 billion to boost global liquidity. The allocation became effective on August 23, 2021.
Shbaikat also explained that similar to any other IMF member country, Yemen can exchange its SDRs for hard currencies with other IMF countries in a stronger financial position agreeing to help others when needed.
Yemen could also use its SDRs in a range of operations with other countries or to settle financial obligations to the Fund.
As of August 20, the SDR interest rate is 0.05 percent.
