Why we’re watching: If and when this trust comes into being — with International Monetary Fund staff aiming for board approval at the April 2022 Spring Meetings — it could provide an important backstop for countries undergoing debt crises and in need of climate and health system investments.

Staff: None so far, but Ceyla Pazarbasioglu and Uma Ramakrishnan have been making the case for the RST publicly.
$: $50 billion proposed fund within IMF.
HQ: IMF HQ in Washington, D.C.
Tidbit: The fund is set up to allow low-income countries to borrow against the Special Drawing Rights of high-income countries who choose to participate. Those SDRs aren’t actual money but are “reserve assets” that can be exchanged for hard currency to buy vaccines or make other investments.
Follow: Shabtai Gold, Adva Saldinger, and Devex Invested.

Analysis: 2021 was the year the global development community got familiar with SDRs and discovered they could be a potential new source of funding for low-income countries during an unprecedented crisis. Then we found out that the $650 billion topline figure would not easily translate into new development finance, not least because the richest countries own most of those reserves and redirecting them is a challenge. But IMF is on the cusp of creating this new trust that could provide a pool of $50 billion to countries in dire need, including all low-income and many middle-income countries. The fund would be designed to rechannel SDRs and, perhaps, currencies from high-income nations. That amount would be on the scale of adding another regional MDB to the world. Perhaps not enough, but not insignificant either. — RK.

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