BANKING AFFAIRS

Detailed explanation-1: -The SDR is an international reserve asset created by the IMF to supplement the official reserves of its member countries. The SDR is not a currency. It is a potential claim on the freely usable currencies of IMF members.

Detailed explanation-2: -Who can hold SDRs? Individuals and private entities cannot hold SDRs. IMF members – and the IMF itself – hold SDRs and the IMF has the authority to approve other holders, such as central banks. As of end-January 2021, there were 15 organizations approved as prescribed holders.

Detailed explanation-3: -The Special Drawing Right (SDR) is an interest-bearing international reserve asset created by the IMF in 1969 to supplement other reserve assets of member countries. The SDR is based on a basket of international currencies comprising the U.S. dollar, Japanese yen, euro, pound sterling and Chinese Renminbi.

Detailed explanation-4: -The International Monetary Fund (IMF) allocates Special Drawing Rights (SDR) to different countries. Private parties cannot hold Special Drawing Rights (SDR). During the 2009 global financial crisis to give liquidity in the global economic system more than $ 180 billion XDR was allocated.