IMF’s Georgieva, Venezuelan acting president discuss use of SDRs for earthquake needs

By David Lawder

WASHINGTON, July 9 (Reuters) – The International Monetary Fund said on Thursday that Managing Director Kristalina Georgieva spoke to Venezuela’s Acting President Delcy Rodriguez about using the country’s paid-in $350 ​million reserve tranche of IMF Special Drawing Rights assets ‌to address urgent humanitarian needs from twin earthquakes.

IMF spokesperson Julie Kozack said that Georgieva and Rodriguez discussed the economic blow and humanitarian needs arising from the June 24 quakes, which have killed more than 3,800 people, injured nearly 17,000 and ‌left ​nearly 18,000 Venezuelans homeless.

“They also discussed the ⁠use of Venezuela’s reserve ⁠tranche at the IMF, which provides an important and readily available source of liquidity that can be mobilized quickly to help address urgent humanitarian needs arising from the disaster. We have been ​working with counterparts to facilitate access to Venezuela’s own resources at the fund,” Kozack said.

Rodriguez said last week that Venezuela was creating ⁠a $200 million reconstruction fund with the ⁠IMF, and that the money would go to contractors ​to rebuild lost homes. She said both the IMF and World Bank ​have offered aid to help Venezuela with recovery efforts.

The IMF ‌has been re-engaging with Venezuela since the U.S. ousted former President Nicolas Maduro in January, but the South American oil producer is far from qualifying for an IMF loan program because it first needs ⁠to engineer a complex restructuring of some $200 billion in debt.

SDRs are the IMF’s reserve assets that countries hold at the fund, based on their ⁠shareholding. They are backed ‌by dollars, euros, yen, sterling and yuan.

Kozack said ⁠the discussions centered on Venezuela’s SDR reserve fund, ​which was ‌about $350 million as of July 8, not its $4.5 ​billion SDR ⁠allocation.

She said the reserve fund is “basically its readily available claim from its paid-in reserve assets to the IMF, and that’s different from the SDRs that Venezuela has from the SDR allocation,” adding that these SDRs could be exchanged for underlying currencies for use.

(Reporting by David Lawder; Editing ​by Mark Porter)