Special Drawing Rights

Subject – Economy

Context – IMF allocates 12.57 billion SDRs to India.

Concept –

The SDR is an international reserve asset, created by the International Monetary Fund (IMF) in 1969 to supplement its member countries’ official reserves.
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 value of the SDR is calculated from a weighted basket of major currencies, including the U.S. dollar, the euro, Japanese yen, Chinese yuan, and British pound.
The interest rate on SDRs or SDRi is the interest paid to members on their SDR holdings.

International Monetary Fund

IMF is an organization working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
Created in 1945, the IMF is governed by and accountable to the 189 countries that make up its near-global membership. India Joined on December 27, 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 enables countries (and their citizens) to transact with each other.
The Fund’s mandate was updated in 2012 to include all macroeconomic and financial sector issues that bear on global stability.