IMF boost of €500m to State's currency reserves
IRELAND can expect a $700m (€500m) boost to its foreign currency reserves after a decision by the International Monetary Fund (IMF) to inject $250bn into its member nations' reserves.
Employing a rarely-used tool, the IMF board of governors approved the allocation of Special Drawing Rights (SDRs), the institution said in a statement.
This was by far the largest general SDR allocation in the body's six-decade history and will take effect on August 28.
An SDR is an interest-bearing IMF asset based on a basket of international currencies -- the dollar, yen, euro and pound -- and calculated daily.
Members can convert SDRs into other currencies. The allocation will be based on three-quarters of a country's size within the IMF, which, in Ireland's case, is 0.4pc.
Equitable
The general increase in SDRs was part of a $1.1 trillion plan agreed at the Group of 20 (G--20) summit in London, in early April, to tackle the global financial and economic crisis.
The IMF said the special allocation would make the allocation of SDRs more equitable, and correct for the fact that countries that joined the fund after 1981 had never received an SDR allocation.
"Members' holdings of newly allocated SDRs will count toward their reserve assets.
Some members may choose to sell part or all of their allocations to other members in exchange for hard currency -- for example, to meet balance of payments needs -- while other members may choose to buy more SDRs as a means of re-allocating their reserves," the IMF said.
