Enhancing International Monetary Stability--A Role for the SDR?

Date: January 7, 2011
Electronic Access: Full text

Summary:The SDR has enjoyed renewed attention lately in the context of debates on international monetary reform. To be sure, the term SDR has been used to refer to three different concepts—(i) a composite reserve asset created in 1969: the “official SDR” as defined in the Fund’s Articles; (ii) a potential new class of reserve assets: tradable SDRdenominated securities issued by the Fund or an investment vehicle backed by a subset of the Fund’s membership; and (iii) a unit of account, which could be used to price internationally traded assets (e.g., sovereign bonds) and goods (e.g., commodities), to peg currencies, and to report balance of payments data. All three are discussed in this paper.

Series : Policy Paper
Subject(s): International monetary system | SDR role | Reserve assets | Reserves accumulation | SDRs | SDR valuation basket | Basket of currencies composition | Exchange rate variability | Exchange rate stability