The International Monetary Fund board approved $650 billion aimed at struggling countries to help them pay for medical care and coronavirus vaccines.
The money is coming from reserve funds and will go to creating what is called a Special Drawing Rights allocation with the hopes of helping countries who need help paying for coronavirus vaccines, The New York Times reported.
The Special Drawing Rights will be used by the 190 member countries to cash in assets for currency with allotments going to each country based on their country’s economic size and shares in the fund.
The move by the IMF is backed by the Biden administration, but was criticized by Republicans who say it's ineffective to help poorer countries and will only give money to countries who don’t need it, according to the Times.
The program works by allowing countries to trade drawing rights for cash, but criticism has risen because it does involve rich countries having to transfer holdings to poor countries voluntarily.
IMF’s response to such criticisms has been to create a new fund where the goal is $100 billion in money provided by rich countries from their excess special drawing rights.
Poor countries would be able to take loans from the $100 billion to benefit their country’s healthcare system.
The IMF is also working to increase transparency at the request of the U.S. so U.S. adversaries are not benefiting from the program, according to NYT. The U.S. said it will give $20 billion to the fund.
“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,” Kristalina Georgieva, managing director of the IMF, said.
IMF’s board of governors is expected to approve the plan with the Special Rights Drawing allocation expected to be done by the end of August.