US taking ‘all measures’ to prevent Russia from benefiting from IMF-Treasury authority assets

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IMF Headquarters in Washington

By Andrea Schallal and David Lauder

WASHINGTON (Reuters) – The United States is doing everything possible to prevent Russia from benefiting from its International Monetary Fund (IMF) reserve assets, a US Treasury official said on Friday, adding that Moscow faces a great if Obstacles to do so if not insurmountable.

Russia received $17 billion in IMF assets known as Special Drawing Rights (SDRs) in a new fund allocation last year, but to spend that amount it will have to find a country that pays interest. Be willing to exchange SDRs for the underlying currencies in – bearing debt.

The official said the United States and its allies, which represent the vast majority of counterparties available in the IMF’s SDR trading system, would not conduct any such exchanges.

“The United States is committed to taking all measures to prevent Russia from benefiting from its holdings of IMF SDRs,” the Treasury official said on condition of anonymity.

“As a result of sanctions from the United States and our partners, the Russian regime will face significant, even insurmountable obstacles to using its SDRs.”

Even if Russia’s central bank may have acquired major currencies such as the dollar, euro, yen or pound through SDR transactions, sanctions imposed by the United States and major partners following the Russian invasion of Russia have kept these assets “effective”. will be stabilized”. February 24 in Ukrainian territory, added the officer.

Republican lawmakers in the US this week told Treasury Secretary Janet Yellen that they needed to stop Russia swapping SDRs, warning that the allocation would ease previous sanctions on Russia even before it invaded Ukraine. Had given.

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All IMF members received the distribution of SDRs – assets backed by the dollar, euro, yen, pound sterling and yuan – in proportion to their share in the fund aimed at helping the poorest countries fight the COVID-19 pandemic.

US lawmakers also said Yellen and US allies should create a contingency plan to prevent a bailout if an economically weaker Russia is forced to turn to the IMF for future loans.

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About the author: Cory Weinberg

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