Serbia Gets USD 890 Million from IMF to Fight Pandemic and Consequences of Coronavirus Crisis

The International Monetary Fund (IMF) has provided Serbia with 627.6 million Special Drawing Rights (SDRs), which is equivalent to a sum of around USD 890.22 million, or EUR 759.71 million, the vice-governor of the National Bank of Serbia (NBS), Ana Ivkovic, says for Tanjug.

Ivkovic points out that this is a considerable amount, considering that Serbia’s quota at the IMF is 0.14%.

According to her, the IMF has distributed 95.8% of the total allocation of the USD 650 billion of SDRs, which the Board of Directors of the IMF approved as support to liquidity and the fight of the member-states against the pandemic and the consequences of the coronavirus crisis.

Vice-governor Ivkovic estimates that the IMF has shown, even during the crisis, that it is not just a “policeman”, but also an institution that worries about global finances.

She reminds that the allocation of SDRs was discussed last year as well, but that the proposition did not receive considerable support until this year.

– In late July, Kristalina Georgieva, the managing director of the IMF, gave her proposal for the allocation of SDRs in the amount of as much as USD 650 billion, which is truly an enormous sum. The decision was adopted by the Board of Directors of the IMF on August 2, which was followed by yesterday’s allocation of 95.8% SDRs of the total amount of USD 650 billion – explains Ivkovic.

She also notes that the IMF has provided clear guidelines, according to which the aim of this allocation is to meet the long-term needs for reserves of each country, to build consumer and business trust in the countries where it doesn’t exist and to increase it where it does, as well as to support the recovery from the effects of the pandemic, especially in the most vulnerable countries.

When it comes to the use of these funds, Ivkovic says for Tanjug that each country is free to use them in line with their capabilities.

– It can use them to boost FX reserves, to repay some bigger debts, or, for example, if it is planning to enter the international market, instead, it can use these funds – she points out.

She says, however, that these funds cannot act as a replacement for structural reforms, which means that each country needs to continue executing them.

The vice-governor of the NBS says that it is not yet known how Serbia is to spend these funds, which, she adds, will be discussed with the executive authorities in Serbia.

Ivkovic says that this means a lot for Serbia, primarily in terms of increasing the trust.

– Globally and for the international community, this means an increase in the trust, and, with that, more favorable financial conditions. The more favorable the financial conditions are on the global level, the more it reflects positively on Serbia – she emphasizes.

She reminds that, at the end of July, Serbia’s FX reserves amounted to EUR 14.58 billion and that now they are even larger, as noted by the NBS Governor Jorgovanka Tabakovic at the presentation of the inflation reports, being 10% higher than before the crisis.

Međunarodni monetarni fond-MMF Beograd

Narodna banka Srbije Beograd

IMF

Ana Ivković

Special Drawing Rights

SDR