Special drawing rights (SDR)

By | 2017-09-13T15:40:03+00:00 13th September 2017|

The IMF (International Monetary Fund) uses an SDR as an artificial currency and is basket of national currencies. The IMF invented Special drawing rights (SDR) in 1969 as an international type of monetary reserve currency in addition to the existing reserves of IMF member states. SDRs augment international liquidity by supplementing the standard reserve currencies. SDRs came into being in response to concerns over the limitations of gold and dollars as the sole means of settling international accounts.

The IMF uses SDRs for internal accounting purposes. SDRs are allocated by the IMF to its member countries and are backed by the full faith and credit of the member countries’ governments.