Special Drawing Rights

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Special Drawing Rights

(SDRs), type of international monetary reserve currency established (1968) by the International Monetary FundInternational Monetary Fund
(IMF), specialized agency of the United Nations, established in 1945. It was planned at the Bretton Woods Conference (1944), and its headquarters are in Washington, D.C.
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 (IMF). Created in response to worries concerning the limitations of gold and dollars as the sole means of settling international accounts, SDRs are designed to augment international liquidity by supplementing the standard reserve currencies. SDRs are assigned to the accounts of IMF members in proportion to their contributions to the fund. Each participating country agrees to accept them as exchangeable for reserve currencies in the settlement of international accounts. Deficit countries can use them to purchase stronger currencies, which then can be used to pay off balance-of-payments debts. As nations adopted the current system of floating exchange rates (1973), the value of SDRs began to be set relative to a "basket" of major currencies. In 1976 the IMF increased the share of the less-developed countries and moved to make SDRs the primary reserve asset of the international monetary systeminternational monetary system,
rules and procedures by which different national currencies are exchanged for each other in world trade. Such a system is necessary to define a common standard of value for the world's currencies.
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, supplanting gold and dollars. In 1981 the IMF reduced the basket to five currencies (the U.S. dollar, German Deutschmark, Japanese yen, French franc, and British pound). In 1999 the Deutschmark and franc were replaced by their equivalents in the euro, and in 2016 the Chinese yuan was added to the basket. All IMF accounting is done in SDRs, and commercial banks accept SDR-denominated accounts. The IMF has the exclusive right of allocating SDRs; the last such allocation was made in 2009.
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References in periodicals archive ?
He also called on Yushchenko to do "everything possible to remove any possible obstacles, including on possible payments through special drawing rights, to ensure that Ukraine meets its commitments".
The SDR allocation will be made to IMF members that are participants in the Special Drawing Rights Department (currently all members) in proportion to their existing quotas in the fund, which are based broadly on their relative size in the global economy.
The SDR allocation will be made to IMF members that are participants in the Special Drawing Rights Department in proportion to their existing quotas in the fund, which are based broadly on their relative size in the global economy.
"We should also agree on a fresh allocation of SDRs (special drawing rights) of around 250 billion dollars.
But he does not make a convincing case for the richer nations accepting his own proposal for Special Drawing Rights.
Then there's wealthy currency speculator George Soros, who argues for more special drawing rights -- essentially low-interest credit cards for governments.
The reserves consist of convertible foreign currencies, gold and International Monetary Fund special drawing rights.
DSM's Engineering Plastics business group has signed a long-term contract with Dow Chemical, giving it capacity drawing rights, i.e., the right to obtain a fixed volume of polycarbonate resins from Dow's plant in Stade, Germany.
This decline is mainly due to the decline of international currencies against the dollar, which is used by the Suez Canal Authority (SCA) in the collection of revenues, since it depends on a Special Drawing Rights (SDR) mechanism launched by the International Monetary Fund (IMF).
Japan's foreign exchange reserves consist of securities and deposits denominated in foreign currencies plus the International Monetary Fund (IMF) reserve positions, IMF special drawing rights and gold.
The Special Drawing Rights fell by $25.6 million to $4.430 billion, while India's reserve position with the IMF declined by $11.5 million to $1.995 billion, the RBI said.
The reserves are made up of securities and deposits denominated in foreign currencies and gold, as well as reserve positions and special drawing rights Japan holds at the International Monetary Fund.