ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Liquidity and the World s Poor

DESPITE the rapid expansion in international liquidity the IMF's concern over its inadequacy is quite justified. Total international reserves (excluding gold) increased sharply from SDR 117 billion at end June 1973 to SDR 287 billion at end May 1980. The reserves of the industrial countries more than doubled from SDR 78 billion to SDR 163 billion during this period and that of the non-oil developing countries from SDR 27 billion to SDR 61 billion. The declared reserves of the oil-exporting countries spurted from SDR 11 billion to SDR 62 billion during the same period. Some oil-exporting countries, prominently Saudi Arabia, conceal their reserves by investing their surplus funds in non-marketable US government securities under secret bilateral treaties. The growth in reserves, however, has not kept pace with the growth in annual merchandise imports. For all countries combined, the ratio of international reserves to value of merchandise imports declined perceptibly from 26 per cent in 1973 to 22 per cent in 1979, and for the rest of the world excluding the US the corresponding figure declined from 31 per cent to 25 per cent during the period.

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