Singapore to contribute to IMF grants supporting vulnerable nations: MAS

SINGAPORE – Singapore intends to join international efforts to enhance the capacity of the International Monetary Fund (IMF) to help vulnerable member countries deal with economic shocks, the Monetary Authority of Singapore (MAS) said on Jan 28.

The Republic plans to contribute 25.48 million in Special Drawing Rights (SDRs), the equivalent of about US$34.7 million (S$43.7 million), MAS said.

This will be channelled to the IMF Poverty Reduction and Growth Trust and the IMF Trust for Special Poverty Reduction and Growth Operations for the Heavily Indebted Poor Countries (PRG-HIPC Trust).

The move will be subject to Parliament’s approval at its next sitting on Feb 3.

The SDR is an IMF-created asset which can be exchanged by member countries into specified currencies – currently the US dollar, euro, yen, renminbi and pound – to meet balance-of-payments needs.

The IMF has in recent years asked members with strong external positions and ample reserves to channel some of their allocated SDRs to support vulnerable countries.

The Poverty Reduction and Growth Trust provides concessional loans to low-income countries. Singapore’s contribution of 21 million in SDRs – the equivalent of about US$28.6 million – will be drawn from MAS’ official foreign reserves, MAS said.

Meanwhile, the contribution of 4.48 million in SDRs – the equivalent of about US$6.1 million – to the PRG-HIPC Trust, in support of the provision of debt relief to Sudan, will come from Singapore’s IMF accounts.

Singapore also plans to put 746 million in SDRs, equivalent to about US$1.01 billion, towards a loan to IMF’s Resilience and Sustainability Trust.

The multilateral effort, which helps vulnerable nations address longer-term structural challenges like climate change and pandemic preparedness, has so far been supported by 21 other countries.

These SDRs will be taken out of a general allocation of 3.73 billion in SDRs to Singapore by the IMF in 2021, MAS said.

The IMF had issued a total of 650 billion in SDRs to all member countries that year, to help them build confidence, address the long-term need for reserves, and foster resilience of the global economy.