SDR Allocation 2009

In response to the 2008–09 global financial crisis, the International Monetary Fund (IMF) distributed new Special Drawing Rights (SDRs) to its member countries in two tranches in 2009. The larger general allocation, approved by the IMF Board of Governors in August 2009, distributed SDR 161.2 billion (then roughly US$250 billion equivalent when combined with the special allocation) in proportion to members' IMF quotas. It took effect on 28 August 2009.

A second, special allocation of SDR 21.5 billion became effective on 9 September 2009. This was made possible by the entry into force of the Fourth Amendment to the IMF's Articles of Agreement, originally proposed in 1997 to correct the fact that countries joining the IMF after 1981 had never received an SDR allocation. U.S. acceptance of the amendment in June 2009 cleared the way for activation.

Together the two operations increased outstanding SDRs from roughly SDR 21.4 billion to about SDR 204 billion, an almost tenfold expansion. The action was endorsed by G20 leaders at the April 2009 London Summit as part of a coordinated package to supplement official reserves and ease balance-of-payments pressure on emerging and low-income economies.

Because SDRs are allocated by quota share, advanced economies received the bulk of the new SDRs, while low-income countries received a smaller absolute amount but a meaningful boost relative to their reserves. Critics noted this regressive distribution; supporters argued it provided unconditional, no-cost reserve assets at a moment of acute dollar funding stress.

The 2009 episode set a precedent later invoked during the COVID-19 pandemic, when the IMF approved a far larger general allocation of SDR 456 billion (about US$650 billion) in August 2021. Both events are central reference points in debates over SDRs as a tool of crisis response and development finance.