KARACHI - The International Monetary Fund (IMF) is planning to inject $250 billion into the global economy to bolster countries reserves as part of measures to combat the world economic crisis. The Funds Executive Board backed this proposal to provide liquidity to the global economic system by supplementing 186 member countries foreign exchange reserves. About $100 billion of the new allocation will go to emerging markets and developing countries, of which low-income countries will receive over $18 billion. The proposal will now be submitted to the IMFs Board of Governors for final approval. The SDR allocation is a key part of the Funds response to the global crisis, offering significant support to its members in these difficult times, IMF Managing Director Dominique Strauss-Kahn said in a statement issued after the meeting of funds executive board meeting held on July 20 in Washington. The SDR allocation was requested as part of a $1.1 trillion plan agreed at the Group of Twenty (G-20) summit of industrialised and emerging market countries in London in April and endorsed by the International Monetary and Financial Committee (IMFC) to tackle the global financial and economic crisis by restoring credit, growth and jobs in the world economy. If approved by the Board of Governors with 85 percent majority of the total voting power in a vote scheduled to close on August 7, the SDR allocation will be effected on August 28. The allocation is a prime example of a cooperative monetary response to the global financial crisis, Strauss-Kahn said. The global economy is beginning to pull out of a recession unprecedented in the post-World War II era, but stabilisation is uneven and the recovery is expected to be sluggish. Financial conditions have improved more than expected, owing mainly to public intervention and recent data suggest that the rate of decline in economic activity is moderating, although to varying degrees among regions. Economic growth during 2009-10 is now projected to be about 1/2 percentage points higher than projected in the April 2009 World Economic Outlook (WEO), reaching 2.5 percent in 2010. But despite some positive signs, the global recession is not over and the recovery is still expected to be slow, as financial systems remain impaired, support from public policies will gradually diminish and households in countries that suffered asset price busts will rebuild savings. To combat the crisis, the IMF has stepped up lending and is raising additional money. Alongside the SDR allocation, the IMF is in the process of raising new resources for its lending activities in response to an associated G-20 request to treble the Funds resources to $750 billion to underpin its lending activities. The Fund has signed new borrowing arrangements with Japan, Canada and Norway, enabling it to mobilise more than $100 billion and has created a new framework for issuing notes to interested members, which would allow to raise further resources as required. These and other additional commitments from members, already totalling more than $400 billion, are intended to be rolled into the New Arrangements to Borrow (NAB), putting the Fund in a stronger position than ever to support members in the present crisis and in future times of need.