Special Drawing Rights

Special Drawing Rights (SDRs), type of international monetary reserve currency established (1968) by the International Monetary Fund (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 system, 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.

The Columbia Encyclopedia, 6th ed. Copyright© 2018, The Columbia University Press.

Special Drawing Rights: Selected full-text books and articles

International Monetary Reform and the Developing Countries By William R. Cline The Brookings Institution, 1976
Librarian's tip: Chap. Three "The SDR Aid Link"
New Sources of Development Finance By A. B. Atkinson Oxford University Press, 2004
Librarian's tip: Chap. 5 "A Development-Focused Allocation of the Special Drawing Rights"
Monetary Theory: National and International By Alvaro Cencini Routledge, 1997
Librarian's tip: "A Practical Attempt at Solving the International Liquidity Problem: The Creation of the Special Drawing Rights" begins on p. 157
A Concise History of European Monetary Integration: From EPU to EMU By Horst Ungerer Quorum Books, 1997
Librarian's tip: "A New Reserve Asset: The Special Drawing Rights" p. 80
Economic Assistance to Developing Countries through the IMF By Richard Goode The Brookings Institution, 1985
Librarian's tip: "Special Drawing Rights with a Link to Aid or Development Finance" begins on p. 40
International Economics By L. Alan Winters Routledge, 1992 (4th edition)
Librarian's tip: "Special Drawing Rights" begins on p. 421
IMF Lending to Developing Countries: Issues and Evidence By Graham Bird Routledge, 1995
Librarian's tip: "SDRs and Other Forms of Fund Lending" begins on p. 82
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