THE IMF has not exactly stood on the sidelines during the covid-19 pandemic. Since the onset of the crisis, it has extended loans worth about $130bn to 85 countries and provided debt-service relief to some poor economies. Yet given the severity of the pandemic and the IMF’s ample balance-sheet—its lending capacity was boosted to a cool $1trn after the global financial crisis—you might have expected more. On July 8th the fund took what looks like a big step in the right direction, by deciding to create $650bn in new foreign-exchange reserves. How generous is it really?

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The plan does not involve direct lending to countries, nor draw on the IMF’s balance-sheet. It instead entails the creation and allocation of “special drawing rights” (SDRs), a quasi-currency created in the 1960s in…

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