Special Drawing Rights

News: India has opposed the general allocation of new Special Drawing Rights (SDR) by the International Monetary Fund(IMF) because it might not be effective as new SDR allocation provides all 189 members with new foreign exchange reserves with no conditions.

Facts:

• Special Drawing Right(SDR):It is neither a currency nor a claim on the IMF.It is an international reserve asset created by the IMF in 1969 to supplement its member countries official reserves.
• The value of the SDR is based on a basket of five currencies—the U.S. dollar, the euro, the Chinese renminbi, the Japanese yen and the British pound sterling.
• The SDR basket is reviewed every five years or earlier if warranted to ensure that the basket reflects the relative importance of currencies in the world’s trading and financial systems.