The U.S. Treasury is leaning toward backing a boost of as much as US$500 billion to the International Monetary Fund’s resources, helping it support developing nations against the COVID-19 crisis, according to people familiar with the matter.

Treasury Secretary Janet Yellen could make a decision as soon as the end of February, when finance ministers and central bankers from the Group of 20 meet, the people said on the condition of anonymity. That event, hosted by Italy, will be held virtually on Feb. 26.

The proposed amount falls below the threshold that would require the Biden administration to seek congressional approval for the move. IMF Managing Director Kristalina Georgieva has been calling for a “sizeable” increase in reserve assets, called special drawing rights or SDRs, since March.

A Treasury spokesperson declined to comment on the department’s thinking.

Yellen and Georgieva spoke on Tuesday about “the need to find multilateral solutions” to global economic issues including Covid-19 and recovery in low-income countries, according to a Treasury readout of the call.

Consulting Adviser

David Lipton, a former IMF first deputy managing director, on Wednesday started on Yellen’s team as a counselor on a temporary basis and is expected to help her navigate the decision, according to people familiar with the matter.

Boosting the IMF’s firepower proved a political battle in Washington in the past, and some have declared their opposition this time around as well. Yellen’s immediate predecessor, Steven Mnuchin, opposed the move, saying that because reserves are allocated to all 190 members of the IMF in proportion to their quota, some 70 per cent would go to the G-20, with just 3 per cent for the poorest developing nations.

As long as the total SDR issuance boost is kept to less than about US$650 billion, the administration would only need to consult with Congress -- rather than get approval -- Mark Sobel, a former career Treasury official, said last year.

Yellen pledged last month, in a written response to questions from Senate Finance Committee members, to indeed consult with Congress before making a decision. She said the IMF and World Bank must do everything “they can to ensure that developing countries have the resources for public health and economic recovery.”