The International Monetary Fund authorised the use of SDRs for the acquisition of hybrid capital instruments issued by Prescribed Holders, such as Multilateral Development Banks (MDBs). This decision marks a pivotal moment, as it expands the scope of SDR prescribed operations to include investments in hybrid capital instruments.
Congratulations to the African Development Bank Group and the Inter-American Development Bank, who have developed this proposal under which member countries may channel SDRs as hybrid capital contributions to help expand their lending capacity. By leveraging SDRs to acquire hybrid capital instruments, MDBs can enhance their financial capacity to support sustainable projects and initiatives in the region.
This development underscores the collaborative efforts within the global financial community to bolster economic resilience and promote inclusive growth. As we move forward, we’re excited about the possibilities that this expanded use of SDRs presents for expanding MDBs lending.
The SDR is an international reserve asset created by the IMF to meet the long-term global need to supplement the existing reserve assets of IMF members.
Read full IMF Report here: Use of SDRs in the Acquisition of Hybrid Capital Instruments of the Prescribed Holders (imf.org)
