Issuing special drawing rights will be a sign of failure for the IMF

THE IMF exists to provide emergency credit to solvent governments and to help insolvent ones regain creditworthiness. During the pandemic it has disbursed about $107bn to poor and middle-income countries which face the twin budgetary challenges of a big hit to growth and the need to spend on health care and vaccines. More is needed, particularly for the poorest countries. So the fund, which on April 5th will kick off one of its bi-annual jamborees, is readying additional financial firepower: a $650bn issuance of new “Special Drawing Rights”, or SDRs. The fund is doing the right thing, but with the wrong tool.