| the reserve asset created through the International Monetary Fund as a supplement to gold and U.S. dollars, for use among the member governments in settling international payments. Abbreviation: SDR, S.D.R. |
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 Commentary
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 Links
What Is The International Monetary Fund?
What Is The Bank For International Settlements?
What Is International Trade?
See also: Balance of Payments - BOP, Currency, Foreign Currency Effects, International Monetary Fund - IMF, Liquidity, World Trade Organization - WTO
Also spelled: SDRSDR