oneill77_ANDREW CABALLERO-REYNOLDSAFP via Getty Images_IMFgeorgieva Andrew Caballero-Reynolds/AFP via Getty Images

How to Use the SDR

With governments in need of new options to shore up national economies during the COVID-19 lockdown, an older but potentially more powerful mechanism is already available. If deployed in the right way, the IMF's international reserve asset could mobilize substantial capital at effectively no cost.

LONDON – Owing to the COVID-19 pandemic, the International Monetary Fund estimates that, between now and the end of 2021, global GDP will suffer a cumulative loss of more than $9 trillion – a figure greater than the size of the Japanese and German economies combined. While the ultimate solution to the crisis will depend on the development and widespread deployment of diagnostics, treatments, and eventually a vaccine, there has also been a proliferation of proposals for containing the pandemic’s economic fallout.