To ease global liquidity, the International Monetary Fund’s executive board hasbacked the allocation of US$ 250 billion worth of special drawing rights (SDRs) to member countries, the IMF said in a statement on July 20.
China, with its current IMF share quota, will receive US$ 9.4 billion worth of SDRs, pending the approval of the Fund’s Board of Governors.
The allocation is part of a US$ 1.1 trillion relief measure to fight the global economic crisis, as agreed to by G20 member states at a London summit in April. From wires.
This is a brilliant move move by the PRC! By opening the door to getting foreign US dollar debt converted into SDR debt (converting those dollars to a basket of euros, pounds, yen and dollars) the PRC can begin pressuring the USA to stop devaluing the dollar. Eventually the USA could be forced to issue debt denominated in SDRs, which would immediately end (or bankrupt?) the USA.
If the chess game of international relations, the guys in Zhongnanhai are saying “Check!” right about now.