Special Drawing Rights (SDR) is an international monetary reserve asset created by the International Monetary Fund (IMF) in 1969. It is not a currency, but rather a bookkeeping entry representing a basket of currencies - the US dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling.
The SDR was created to provide member countries with a supplementary reserve asset that they could use to supplement their official reserves. It serves as a means of international exchange and is designed to supplement the existing official reserves of member countries, including official foreign exchange reserves and reserve positions in the IMF.
The value of the SDR is calculated daily by the IMF, based on daily exchange rates between the component currencies. The SDR has been used in a variety of ways, including as a unit of account for the IMF and other international organizations, as a means of payment between central banks, and as a means of providing liquidity in crisis situations.
More recently, the SDR has been discussed as a potential tool for international economic development. In response to the COVID-19 pandemic, there have been calls for the IMF to issue a large allocation of SDRs to help countries in need of economic support.
Overall, the SDR is an important component of the global economic system and serves as a tool for managing international financial stability.
Special drawing rights SDR
Economy Term
Special Drawing Rights (SDR) is an international monetary reserve asset created by the International Monetary Fund (IMF) in 1969. It is not a currency, but rather a bookkeeping entry representing a basket of currencies - the US dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling.
The SDR was created to provide member countries with a supplementary reserve asset that they could use to supplement their official reserves. It serves as a means of international exchange and is designed to supplement the existing official reserves of member countries, including official foreign exchange reserves and reserve positions in the IMF.
The value of the SDR is calculated daily by the IMF, based on daily exchange rates between the component currencies. The SDR has been used in a variety of ways, including as a unit of account for the IMF and other international organizations, as a means of payment between central banks, and as a means of providing liquidity in crisis situations.
More recently, the SDR has been discussed as a potential tool for international economic development. In response to the COVID-19 pandemic, there have been calls for the IMF to issue a large allocation of SDRs to help countries in need of economic support.
Overall, the SDR is an important component of the global economic system and serves as a tool for managing international financial stability.