Article Summary – Article Example
XXXXXXX Number: XXXXXXX XXXXXXXX XXXXXX XXXXXXX XX – XX – Summary: G20 Weighs IMF Credit Line, New Special Drawing Rights
In order to create a new short term line of credit for countries under economic shock, there have been considerations of a proposal by the International Monetary Fund. The article explains how the G20 is planning to inject the economies with billions of dollars as a means to increase the liquidity. The aim is to inject the economy through the IMF Special Drawing Rights which would further help in stabilising the financial stability of the country at times of the issues and uncertainty caused due to the debt crisis. In order to gain access to the credit line, a special request would need to be made, following which for a period of six months without the conditions of the IMF, for a value of almost 500 percent of the member’s IMF quota or the subscription.
In terms of the global liquidity boost, it is clear that G20 is clearly in sync with the need for global liquidity boost and this is evident from the fact that almost $250 billion had been invested in London in 2009 in order to boost the liquidity levels during the economic downturn and credit squeeze. A combination of Euros, Yen, Sterling and Dollars together contribute to the overall SDR. The allocation to each country is based on the IMF share and is mostly in terms of the size of the economy and the overall reserves and trades.