G7 finance ministers agree to work together to address global supply chain pressures

  • At a meeting hosted by Chancellor Rishi Sunak in Washington DC, G7 finance ministers and central bank governors agreed to work together to monitor pressures in the global supply chain.
  • Rishi Sunak also announced that the UK will commit more than £ 1 billion in Special Drawing Rights to support vulnerable countries and support a new IMF trust fund to help developing countries support economies green and sustainable.
  • G7 finance ministers and central bank governors are also launching a report setting out public policy principles for issuing central bank digital currencies, a digital version of the currency that, if introduced, could be used with banknotes and physical coins.

At a meeting of G7 finance ministers and central bank governors in Washington DC on Wednesday, October 13, Rishi Sunak stressed the importance of global cooperation to ensure that supply chains are more resilient as the world emerging from the pandemic.

This builds on measures taken in the country to alleviate supply chain problems through temporary visas and support for businesses in their transition to a highly skilled, high-wage economy through training courses and to the 130% government super-deduction for capital investments.

After the meeting, Chancellor Rishi Sunak said:

Supply chain issues are felt globally – and financial leaders around the world must work together to address our common challenges.

Today, we have collectively agreed to work closely together over the next few months – and together, we will build a strong and resilient recovery.

Support to vulnerable countries

At Wednesday’s meeting (October 13), the Chancellor also announced that the UK was pledging an additional loan of over £ 1 billion in Special Drawing Rights (SDRs) to the Reduction Trust Fund. IMF Poverty and Growth (PGRT) and called on other countries to do the same. The PGRT provides zero-interest loans to vulnerable countries in need of financial support.

A few weeks before the COP26 conference in Glasgow, the UK also gave its support to the IMF’s resilience and sustainability trust project and called on its global counterparts to do the same. This trust would redirect SDR reserves to low-income and vulnerable middle-income countries to help them address health and climate risks and support green and sustainable economic growth.

Central bank digital currencies

Led by the UK, G7 finance ministers and central bank governors also launched a set of public policy principles for retail central bank digital currencies (CBDCs), which, if introduced, could be a digital form of central bank money that would be used alongside banknotes and coins. This report will help support and inform the exploration of CBDCs and make an important contribution to the global policy conversation.

Carbon pricing

Today, the G7 also agreed, for the first time, to work together to consider how best to coordinate efforts on carbon pricing to mitigate emissions, and explore international solutions to prevent carbon leakage. , helping us achieve the transformational change required by the One Agreement.

More information :

  • Details on the Poverty Reduction and Growth Fund can be found in line.
  • The Central Bank’s G7-agreed report and statement on digital currencies can be viewed online.
  • Although no G7 authority has yet chosen to issue a CBDC, these principles will help design and potentially deliver a CBDC that would be suitable in the future.
  • The Special Drawing Right (SDR) is an international reserve asset created by the IMF to supplement other reserve assets of member countries.
  • The UK pledged this week to funnel around 20% of its new Special Drawing Rights allocation worth around £ 4 billion, of which the UK will lend to the UK 1 billion Special Drawing Rights to the UK. Poverty Reduction and Growth Fund.
  • These loans will be made at a concessional interest rate, which is also expected to provide the equivalent of an additional SDR 100 million in implicit grant resources.
  • Carbon leakage is the displacement of production and associated greenhouse gas emissions, in a way that would not have happened if the pricing (or regulation) of emissions between jurisdictions had been implemented. equivalent manner.
  • The G7 will work together to better understand the macroeconomic consequences of the various possible trajectories towards net zero.


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