Question 19 of 19
Q.What is special drawing rights?
Tamil Nadu DgeTamil Nadu HSC First Year (DGE) Commerce Board 2026Subjective· 2mImportance★★★★★
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Start your 14-day free trial to unlock the full solution →Special Drawing Rights (SDR) is an artificial international reserve asset created by the IMF to add to members' reserves; it is not a currency but a claim that members can exchange for usable currencies to settle international payments.
Special Drawing Rights (SDR) is an international reserve asset created by the International Monetary Fund (IMF) in 1969 to supplement the existing official reserves (gold and foreign currencies) of its member countries. It is popularly known as "paper gold" because it serves the reserve function of gold without being a physical asset.
Key points:
- SDR is not a currency and not a claim on the IMF; it is a potential claim on the freely usable currencies of IMF members.
- Its value is determined on the basis of a basket of major international currencies (such as the US dollar, euro, Chinese yuan, Japanese yen and British pound).
- SDRs are allocated to member countries in proportion to their IMF quotas. …
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