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The executive board of the International Monetary Fund (IMF) has backed the allocation of $650 billion special drawing rights (SDRs) for member countries.

Kristalina Georgieva, managing director of the IMF, made the announcement in a statement.

In April, during the IMF-World Bank spring meetings, Georgieva had announced plan for the SDR to boost international reserves of its member countries.

SDR is an international reserve asset created by the IMF from a pool of currencies.

It is an artificial currency that IMF member states can exchange for freely usable hard currencies like US dollars.

In a statement after a meeting with G20 finance ministers and Central Bank governors, the IMF MD said the SDR allocation proposal will be presented to the IMF’s board of governors for their consideration and approval.

Georgieva said if approved, the SDR allocation will be completed in August.

She described the development as “a shot in the arm for the world”, saying the allocation will boost the liquidity and reserves of all our member countries, build confidence, and foster the resilience and stability of the global economy.

“The IMF Executive Board yesterday concurred in my proposal for a new general SDR allocation equivalent to US$650 billion – the largest allocation in the IMF’s history – to address the long-term global needs for reserves during the worst crisis since the Great Depression,” the statement reads.

“I will now present the new SDR allocation proposal to the IMF’s Board of Governors for their consideration and approval. If approved, we expect the SDR allocation to be completed by the end of August.

“This is a shot in the arm for the world. The SDR allocation will boost the liquidity and reserves of all our member countries, build confidence, and foster the resilience and stability of the global economy.

“In 2009, an SDR allocation contributed significantly to recovery from the global financial crisis and I am confident that this new allocation will have a similar benefit now.

“The SDR allocation will help every IMF member country – particularly vulnerable countries – and strengthen their response to the COVID19 crisis.

“We will maintain active engagement with our membership in the months ahead to identify viable options for voluntary channeling of SDRs from wealthier members to support our poorer and more vulnerable countries to help their pandemic recovery and achieve resilient and sustainable growth, which will also help boost global economic recovery.”