What Georgia will spend" easy money " from the IMF on
At the end of August, the IMF's decision on the largest distribution of the so-called SDR in the history of the Fund (for the recovery of countries ' economies after the pandemic) came into force. Sputnik Georgia asked experts how the decision will affect the Georgian economy.
To help countries cope with the consequences of the COVID-19 crisis, the International Monetary Fund has made a historic decision. On August 23, the distribution of special drawing rights (SDR) among the IMF member countries in the amount of $ 650 billion, approved at the beginning of the month, came into force. This is the largest SDR allocation in the history of the IMF and a stimulus for the global economy during an unprecedented crisis.
The share of countries in the SDR distribution corresponds to quotas in the IMF-shares in the fund's capital. For example, in Georgia it is 0.04%. The size of the shares is calculated using a formula that takes into account the GDP of states, the balance of payments and international reserves.
Georgia received 182.4 million SDR (approximately $ 258.72 million).
Special Drawing Rights (SDR) is a non-physical means for the payment settlements of the fund. The SDR rate is determined daily based on the exchange rates of the dollar, euro, yen, pound sterling and yuan.
Alexander Dzhioev, an analyst at the ACRA Group of sovereign Ratings and Macroeconomic Analysis, notes that countries can use distributed SDRs at their discretion.
However, in his opinion, on the other hand, the distributed funds can also be used outside of transactions with the IMF when they are exchanged for hard currency; in this case, the funds can be spent, for example, on financing social spending, servicing public debt or structural reforms.
What will Georgia spend the SDR on
According to Shengelia, it will be possible to find out where the Georgian authorities will send their part of the SDR after the fact, when the money is spent.
"I can't say exactly where the government will be used and what will be financed from this money. We will find out about this later, when the money is spent. Only then it will be possible to judge how correctly and purposefully they were spent, " he said.
Source sputnik-georgia.ru
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What Georgia will spend" easy money " from the IMF on
At the end of August, the IMF's decision on the largest distribution of the so-called SDR in the history of the Fund (for the recovery of countries ' economies after the pandemic) came into force. Sputnik Georgia asked experts how the decision will affect the Georgian economy.
To help countries cope with the consequences of the COVID-19 crisis, the International Monetary Fund has made a historic decision. On August 23, the distribution of special drawing rights (SDR) among the IMF member countries in the amount of $ 650 billion, approved at the beginning of the month, came into force. This is the largest SDR allocation in the history of the IMF and a stimulus for the global economy during an unprecedented crisis.
The share of countries in the SDR distribution corresponds to quotas in the IMF-shares in the fund's capital. For example, in Georgia it is 0.04%. The size of the shares is calculated using a formula that takes into account the GDP of states, the balance of payments and international reserves.
Georgia received 182.4 million SDR (approximately $ 258.72 million).
Special Drawing Rights (SDR) is a non-physical means for the payment settlements of the fund. The SDR rate is determined daily based on the exchange rates of the dollar, euro, yen, pound sterling and yuan.
Alexander Dzhioev, an analyst at the ACRA Group of sovereign Ratings and Macroeconomic Analysis, notes that countries can use distributed SDRs at their discretion.
However, in his opinion, on the other hand, the distributed funds can also be used outside of transactions with the IMF when they are exchanged for hard currency; in this case, the funds can be spent, for example, on financing social spending, servicing public debt or structural reforms.
What will Georgia spend the SDR on
According to Shengelia, it will be possible to find out where the Georgian authorities will send their part of the SDR after the fact, when the money is spent.
"I can't say exactly where the government will be used and what will be financed from this money. We will find out about this later, when the money is spent. Only then it will be possible to judge how correctly and purposefully they were spent, " he said.
Source sputnik-georgia.ru
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