Economy

Markets

Industries

Insights

Reports

Events

Nation to get $9b in SDRs

By Si Tingting (China Daily)
Updated: 2009-07-22 08:05

China is set to receive about $9 billion from the International Monetary Fund's Special Drawing Rights (SDRs) - the highest among all emerging nations - to boost its economy.

However, the nation is more concerned about whether it would get a better say in the running of the multilateral body to justify its growing economic weight, experts said.

Related readings:  China eyes SDR as global currency  Call for global currency wins int'l backing  China wants US to assume global duty of care for dlr  Brazil joins Russia, China in eyeing IMF bonds

Under the new SDR allocation, the US will receive about $42.6 billion, Japan about $15 billion, China $9 billion, Russia $6.6 billion, India $4.5 billion and Brazil $3 billion.

This is part of the $250 billion allocation of SDRs by the IMF to provide liquidity to the global economic system by supplementing its 186 member countries' foreign exchange reserves. The funds would be available at the end of August.

The SDRs are disbursed in proportion to each member's IMF quota and can be exchanged for hard currency such as the dollar, yen, euro or pound.

Although China would receive more SDRs compared with other BRIC countries, its share falls far short of those of the US and Japan.

"The allocation might be important for some poorer economies, but not China, which now has a massive $2.13-trillion foreign exchange reserve," said Guo Tianyong, director of the Research Center of the Chinese Banking Industry, Central University of Finance and Economics.

"China, which would surpass Japan in terms of economic output, will soon top Japan as the world's second biggest economy, and it deserves a bigger share of the IMF quota, equal to its economic position in the world," he said, adding that China thought highly of the IMF's growing prominence in global financial transactions.