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Grassroots Action Center

Tell Senators to Support the Most Vulnerable Countries in their Fight against COVID19
While U.S. allies, leadership of the the United Nations and the International Monetary Fund (IMF), and hundreds of past and present world leaders advocate for the the IMF to release Special Drawing Rights (SDRs) to help countries combat the global pandemic, the Trump administration remains opposed. SDRs serve as international currency created by the IMF. Just like the Central Bank can create money for the government to spend without using taxpayer dollars, the IMF creates SDRs for countries to spend. Countries can use SDRs to maintain their international reserves or exchange them for currency, such as the US dollar or Euro. This hard currency can then be used to pay off debts, cover domestic costs, or otherwise spent as needed. SDRs come with extremely low interest rates and once traded are a relatively inexpensive way for poor countries to have access to funds without incurring debt. In times of economic crisis, SDRs are particularly useful for low to middle-income countries who cannot afford additional financial burdens.
 
SDRs proved resources that would allow low to middle income countries to fight this pandemic and ease the economic crisis. Countries exchange SDRs for currency to purchase medical supplies, food, and personal protective equipment (PPE). Seventy-six low to middle-income countries are eligible for loans from the World Bank’s International Development Association (IDA) totaling $22 billion in SDRs. This amounts to a 9.4 percent boost to their combined international reserves. For twenty-two of the countries, the boost would be 20 percent or more. What is more, developed countries could potentially lend or donate their unused SDRs to other countries or back to the IMF.
 
Thus far, the United States has refused any IMF plan that will create more SDRs during the COVID crisis. However, prior to the current administration, the U.S has historically been one of the largest supporters of SDRs and one of the biggest users following the 2009 Global Financial Crisis. The U.S. has exchanged dollars for other countries’ SDRs allocations, and the U.S. Treasury earns millions in interest from its current SDR holdings. It is unreasonable for the United States to block an issuance of SDRs preventing impoverished nations from receiving essential funding, especially since there is no cost to U.S. taxpayers.
 
Congress must act swiftly to authorize the IMF to release Special Drawing Rights (SDRs) so that countries across the world have the funds and tools they need to fight the current crisis. Contact your senators today to let them know that you support the release of SDRs in the global fight against COVID-19!
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