Multilateral development banks have been pushed by their shareholders for some time to lend more, and an International Monetary Fund board decision last week could pave the way for an innovative new way to do just that.
The African Development Bank and the Inter-American Development Bank have been working on a proposal for several years that would allow countries to essentially invest some of their Special Drawing Rights — a reserve currency issued by the IMF — in multilateral development banks. The main holdup was whether the IMF would still consider them a reserve asset and how exactly it would all work.
An IMF board decision on Friday provided some clarity, allowing the instrument to move forward.
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About the author
Adva Saldinger@AdvaSal
Adva Saldinger is a Senior Reporter at Devex where she covers development finance, as well as U.S. foreign aid policy. Adva explores the role the private sector and private capital play in development and authors the weekly Devex Invested newsletter bringing the latest news on the role of business and finance in addressing global challenges. A journalist with more than 10 years of experience, she has worked at several newspapers in the U.S. and lived in both Ghana and South Africa.
