IMF kicks off $650bn Reserves Liquidity Support For Nigeria

The International Monetary Fund (IMF) has announced the take-off of its $650 billion set aside under its special drawing right (SDR) to provide liquidity to countries with foreign exchange reserves challenges.

The fund, which IMF accompanies with governance framework support, is expected to help countries to plug external reserves holes and reduce reliance on both domestic and external facilities.

Nigeria is expected to secure $3.35 billion liquidity support to boost wobbly external reserves. The Guardian reported yesterday, that the reserves have been on a downtrend since August 11 after what appeared like a rally in the second half of July turned out to be a breather.

Last week, the gross reserves closed at $33.52 billion while the liquid (or available) form was $33.24 billion, bringing the average figure to $33.38 billion.

Managing Director of IMF, Kristalina Georgieva, noted yesterday, that the largest SDR in the history of the scheme “is a significant shot in the arm of the world and, if used wisely, a unique opportunity to combat this unprecedented crisis”.

She said the SDR allocation would provide additional liquidity to the global economic system, helping to supplement countries’ foreign exchange reserves while “reducing their reliance on more expensive domestic or external debt.