ABOUT THE BOOK
The allocation of Special Drawing Rights (SDRs) to member states of the International Monetary Fund (IMF) during the economic crisis in 2009 has highlighted the unique financing potential of this international reserve asset issued by the IMF. In this paper, ways to effectively utilize the SDR as a source of liquidity and development funding for developing countries are explored.
The SDR is also a key element in many of the proposals for reforming the global reserve system advanced in the wake of the crisis. It is seen as a possible vehicle for the creation of an international reserve currency that would remove the distortions arising from the present dependence on the US dollar. This paper looks at the discussion on SDRs and reserve reform generated by the crisis, and the opportunities it presents to establish a more efficient and development-friendly reserve regime.
ABOUT THE AUTHORS
SOREN AMBROSE is Development Finance Coordinator at ActionAid.
BHUMIKA MUCHHALA is
a researcher with the
2 ALLOCATING SPECIAL DRAWING RIGHTS TO FINANCE DEVELOPMENT
How do SDRs work?
New special allocations of SDRs
Reversible, or temporary, SDRs
Proposals for SDR transfers
3 TOWARDS REFORM OF THE GLOBAL RESERVE SYSTEM
Why a new system?: The risks of relying on the US dollar
The growth of reserves in developing countries – and the cost
Fixing the global reserve system ... and the IMF too
Annex: Language on Global Reserve System and Special Drawing Rights in Key Documents
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