Online Courses (English)
This just in:

State PCS

Daily Updates

Important Facts For Prelims
Switch To Hindi

Special Drawing Rights: IMF

  • 02 Sep 2021
  • 3 min read

Why in News

Recently, the International Monetary Fund (IMF) has made an allocation of Special Drawing Rights (SDR) 12.57 billion (equivalent to around $17.86 billion at the latest exchange rate) to India.

  • Now, the total SDR holdings of India stand at SDR 13.66 billion.

Key Points

  • Special Drawing Rights (SDR):
    • The SDR is neither a currency nor a claim on the IMF. Rather, it is a potential claim on the freely usable currencies of IMF members. SDRs can be exchanged for these currencies.
    • The SDR serves as the unit of account of the IMF and some other international organizations.
    • The currency value of the SDR is determined by summing the values in US dollars, based on market exchange rates, of a SDR basket of currencies.
    • The SDR basket of currencies includes the US dollar, Euro, Japanese yen, pound sterling and the Chinese renminbi (included in 2016).
    • The SDR currency value is calculated daily (except on IMF holidays or whenever the IMF is closed for business) and the valuation basket is reviewed and adjusted every five years.
    • Quota (the amount contributed to the IMF) of a country is denominated in SDRs.
      • Members’ voting power is related directly to their quotas.
      • IMF makes the general SDR allocation to its members in proportion to their existing quotas in the IMF.
    • India's foreign exchange reserves also incorporate SDR other than gold reserves, foreign currency assets and Reserve Tranche in the IMF.
  • International Monetary Fund (IMF):
    • The IMF was set up along with the World Bank after the Second World War to assist in the reconstruction of war-ravaged countries.
      • The two organisations were agreed to be set up at a conference in Bretton Woods in the US. Hence, they are known as the Bretton Woods twins.
    • Created in 1945, the IMF is governed by and accountable to the 190 countries that make up its near-global membership. India joined in December 1945.
    • The IMF's primary purpose is to ensure the stability of the international monetary system — the system of exchange rates and international payments that enable countries (and their citizens) to transact with each other.
      • Its mandate was updated in 2012 to include all macroeconomic and financial sector issues that bear on global stability.
    • Reports by IMF:

Source: IE

SMS Alerts
Share Page