As a form of international solidarity to help low-income countries and the commitment of G20 members, Bank Indonesia (BI) expressed its ability to support the IMF program for poverty alleviation (Poverty Reduction and Growth Trust/PRGT).
This support is provided in the form of a contribution to the program amounting to SDR 26 million which will be met from interest earned on Bank Indonesia deposits placed with the IMF. For the record, SDR is a special drawing right. SDR is a currency unit used by the IMF.
From data compiled by CNBC Indonesia, 1 SDR is equal to US$ 1.31. Thus SDR 26 million is equivalent to US$ 33.8 million.
“This assistance aims to help low-income countries achieve economic stability in order to reduce poverty, which is provided, among others, to African countries as well as several member countries of the South East Asia Voting Group (SEAVG) constituency such as Laos, Tonga and Nepal, of which Indonesia is a member,” said Bank Indonesia in a press release.
BI emphasized that this contribution is expected to show Indonesia’s role in increasing the resilience of the global economy, which in the end has the potential to have a positive impact on the national economy.
PRGT is the IMF’s main means of providing concessional financing (currently at zero interest rates) to low-income countries.
Quoted from the IMF, PRGT’s interest-free loans support well-designed economic programs that help catalyze additional funding from donors, development institutions and the private sector. PRGT-supported programs also play an important role in creating an enabling environment for successful debt resolution in distressed countries.
And—as seen during the pandemic—PRGT can also provide emergency assistance when shocks occur.
Source : CNBC