Wednesday, August 26, 2009

What is SDR?

SDR (Special Drawings Rights) :

this were created by the IMF in 1969 as a type of reserve assets to supplement international reserves of gold & national currencies for setting balance of payment accounts. today, teh SDR is the IMFs main reserve asset, & is held by member-countries of the IMF as part of their international reserves. a member may use their special account to obtain needed foreign currency from another member. SDR is not a real money & has no gold backing. unlike gold & foreign exchange, it doest not have tangible life of its own. it is created by IMF itself, & takes the form of book-keeping entries in a special account managed by the fund.

- it is valued in terms of 5 currencies:
  • US Dollar
  • German Deutsche marc
  • UK sterling
  • French Franc
  • Japanese Yen

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