The regional representative of the International Monetary Fund (IMF) for Yemen, Ghazi Al-Shbeikat, stated that Yemen will receive approximately $665 million from the IMF's reserves today, Monday, which will help alleviate the severe economic and humanitarian crisis in the war-torn country. Kristalina Georgieva, the Fund's Managing Director, tweeted that all member countries of the Fund will receive their new allocations of Special Drawing Rights (SDRs) today, urging these countries to use these allocations responsibly and wisely for the benefit of all citizens.
The IMF Board of Governors had approved the largest support in its history, amounting to $650 billion in Special Drawing Rights (456 billion units), to assist countries in dealing with the increasing repercussions of the COVID-19 pandemic. Al-Shbeikat noted in a statement to Reuters that the Special Drawing Rights allocations will boost Yemen's foreign currency reserves by more than 70% and provide support for a country in dire need to address the crisis, including urgent food and medical needs.
The battles between the Saudi-led coalition and Iran-backed Houthis over the past six years have depleted Yemen's foreign currency reserves, which imports most of its goods. More than 80% of the population relies on aid. Countries must convert their Special Drawing Rights into hard currency to spend them, which requires finding a willing country for the exchange.
The Special Drawing Right (SDR) is an international reserve asset created by the IMF in 1969 to supplement its member countries' official reserves. The total amount of allocated SDRs to date is 660.7 billion SDRs (equivalent to $943 billion), and the value of the Special Drawing Right is determined based on a basket of five currencies: the US dollar, the euro, the Chinese yuan, the Japanese yen, and the British pound.
