IMF eyes new relationship with biggest shareholder after Biden win

  • 11/12/2020
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WASHINGTON (Reuters) - The election of Joe Biden as U.S. president gives the International Monetary Fund a chance to reset its relationship with the United States, its largest shareholder, and make green initiatives a bigger part of its global economic recovery plan.IMF Managing Director Kristalina Georgieva sent “personal” letters to President-elect Biden and running mate Kamala Harris this week, an IMF spokesman told Reuters, without providing any details about their contents. Trump has mounted legal challenges to the election results, thus far without evidence, but the Fund typically shies away from publicly commenting on elections until they are concluded. Sources familiar with Georgieva’s goals say Biden’s commitment to multilateral institutions and his pledge to re-enter the Paris climate agreement should help the IMF advance its own targets. Biden’s transition team did not respond to a question about communications with Georgieva and the IMF. One IMF source said that some member countries are hoping Biden will reconsider the Trump administration’s opposition to new IMF resources, including a general allocation of new Special Drawing Rights that could boost members’ currency reserves by hundreds of billions of dollars. Treasury Secretary Steven Mnuchin has opposed such measures, which were last deployed during the 2009 financial crisis when Biden was vice president. Mnuchin has also opposed a new increase in the IMF’s quota resources that could boost the shareholding of China and other big emerging market countries, a move also executed when Biden was last in office. “On SDR allocation, we certainly hope that it will be possible to return to the issue,” the source said, adding that past experience shows that a new quota agreement will be complicated no matter which party holds the White House.

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