ANALYSIS-SDRs and debt holidays still just a band-aid for debt-hobbled countries

By Reuters3 days ago

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By Marc Jones

LONDON, April 7 (Reuters) - Debt experts, charity groups and investors welcomed news on Wednesday that the world's poorest countries will get new IMF funds and COVID-19 debt relief, but they also cautioned that for some it would still only be a band-aid solution.

A new $650 billion allocation of the IMF's quasi currency known as Special Drawing Rights (SDRs) will provide over $20 billion of funding, while an extended repayment holiday on loans from rich G20 nations will temporarily save another $7 billion.

The $20 billion share of the SDR increase alone is more than all the emergency money the IMF provided in Africa last year and in relative terms, those under the most serious stress will receive the biggest benefit.

Zambia's share of the handout - SDRs are allocated roughly according to the size of economies - will double its international reserves. It will lift those of Argentina, Ethiopia, Ecuador, Kenya, Ghana and Sri Lanka by at least 10%.

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