Special Drawing Rights (SDRs)

Special Drawing Rights (SDRs) are international reserve assets created by the International Monetary Fund (IMF) to supplement member countries’ official reserves. They are not physical currencies but a unit of account based on a basket of major currencies like the US dollar, euro, yuan, Japanese yen, and British pound. SDRs can be exchanged among countries for currencies to support their economies or to settle international transactions. They help stabilize global financial systems by providing liquidity and reducing dependence on individual national currencies, especially during times of economic stress.