Kenya has earned Ksh80.8 billion worth of Special Drawing Rights (SDRs) from the International Monetary Fund (IMF).
SDRs are a form of foreign exchange reserves and member countries including Kenya accumulate SDRs by obtaining financing with the IMF. Transactions with the institution are expressed in SDR terms.
Kenya's cumulative SDR allocations now stand at Ksh120.6 billion.
This comes after the IMF Board of Governors on Monday night approved a general allocation of SDRs equivalent to Ksh65 trillion (US$650 billion) to boost global liquidity.
"This is a historic decision – the largest SDR allocation in the history of the IMF and a shot in the arm for the global economy at a time of unprecedented crisis," a statement from IMF read in part.
The international lender noted that SDR will particularly help Kenyan and other countries struggling with the negative effects of Covid-19 to cope with the impact of the pandemic.
"The SDR allocation will benefit all members, address the long-term global need for reserves, build confidence, and foster the resilience and stability of the global economy," it continued.
SDRs are interest-bearing international reserve assets created by the IMF to enhance other insurance assets by member countries.
Notably, SDRs are not a loan or currency but they can be claimed on free usable currencies of IMF members.
Kenya can choose to sell the SDRs under the voluntary arrangements for actual currency. According to the IMF, one SDR is equivalent to Ksh155.
Alternatively, Kenya can also choose to hold the SDRs as part of its foreign exchange reserves. SDRs can also be used for authorized operations such as the payment of loans, obligations and pledges.
Further, Kenya can use the SDRs tapped for operations and transactions involving the IMF such as the payment of interest, loans or quotas.
