Special Drawing Rights (SDR)
An international type of monetary reserve currency, created by the International Monetary Fund (IMF) in 1969, which operates as a supplement to the existing reserves of member countries. Created in response to concerns about 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. Investopedia Says:
You can think of SDRs as an artificial currency used by the IMF and defined as a "basket of national currencies". 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. Related Terms:
Balance of Payments - BOP
Balance Of Trade - BOT
Currency
Foreign Currency Effects
International Monetary Fund - IMF
Liquidity
Monetary Reserve
Reserve Tranche
World Trade Organization - WTO |