With reference to the Special Drawing Rights (SDR) consider the following statements: SDR is neither a currency nor a claim on the IMF. Private parties cannot hold Special Drawing Rights (SDR). International Monetary Fund (IMF) gives equal weightage to the basket of currencies to determine SDR value. Which of the statements given above is/are correct?

[A] 1 only

[B] 1 and 2 only

[C] 2 and 3 only

[D] None

Answer: B

Notes:

Statement 1 is correct– 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.
Statement 2 is correct- SDRs cannot be held by private entities or individuals.
Statement 3 is incorrect– All the five currencies(Chinese yuan, US dollar, euro, Japanese yen, and British pound sterling) have different weightage with the US dollar having the highest weightage.