The IMF’s executive board will discuss the recommendation for a new allocation of $650 billion of the IMF’s Special Drawing Rights later on Tuesday, the sources said. It would be the first expansion of the IMF’s reserves since a $250 billion allocation approved in 2009, during the global financial crisis. If approved, the additional reserves - which can be turned into hard currencies by members or shared with needier countries - should be available later this year.

Global finance officials backed the expansion after new U.S. Treasury Secretary Janet Yellen offered her qualified support while also demanding greater transparency about how the SDRs would be used and traded. Yellen, asked about a possible $650 billion SDR allocation during congressional testimony on Tuesday, said an expansion was in the U.S. national interest because it would help some of the neediest countries avoid contractionary policies that might impede a global recovery.

Eric LeCompte, a UN adviser and executive director of Jubilee USA Network, a non-profit that advocates for debt relief, said a new allocation would provide needed relief to developing countries struggling to deal with the pandemic and its economic fallout. “This is incredible progress because now the clock starts,” he said. An SDR allocation would likely come just in time to help heavily indebted Argentina avoid defaulting on required payments to the IMF.

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