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Special Drawing Rights
Special Drawing Rights
Special Drawing Rights
Points to Remember
Published on Saturday, December 17, 2016
By Admin
Introduction
Special Drawing Rights (SDR) was created in 1969 by IMF as a fixed exchange rate
system to support the Bretton Woods agreement.
SDR Calculation
SDR is calculated based on the basket of five international currencies
The five currencies include
o US Dollar
o Euro
o Yen
o Pound and
o Yuan
Role of SDR
o SDR had a dominant role in the world economy and trade during the fixed rate
regime
o SDR role diminished after the collapse of fixed rate regime
o The floating rate regime saw huge accumulations of international currency
reserves
o In 2009, SDR regained popularity by allocating 182.6 billion SDR to global
economy amidst the global economic crisis
o IMF helped world nations to get out of the financial crisis through SDR allocation
o Now, SDR has become a dominant force in international economic scenario
Value of SDR
SDR Weightage
Following is the weight assigned to the basket of five currencies
o US Dollar – 41.73 %
o Euro – 30.93 %
o Yuan – 10.92 %
o Yen – 8.33 %
o Pound Sterling – 8.09 %
Conclusion