abhishreshthaa
Abhijeet S
What is SDR?
Created by IMF in 1960
All the members nations had their reserve assets with IMF & on these reserve assets the IMF use to allocate SDR
Why Created SDR
First all the transactions were made in US$ which lead to-
Monopoly of USA
Deficit in U.S. balance of payment.
Problem in international liquidity
Value of SDR
It is determined by the basket of currencies.
The U.S. dollar value of SDR is posted daily on IMF website
Calculation
It is calculated as sum of specific amount of four currencies valued
In U.S. dollars on the basis of exchange rates the basket is reviewed in every five years.
The most recent review of SDR valuation took place in October 2000
SDR’s Failure
Problem of international liquidity was not solved
All major currencies shifted to floating exchange rate regime
Created by IMF in 1960
All the members nations had their reserve assets with IMF & on these reserve assets the IMF use to allocate SDR
Why Created SDR
First all the transactions were made in US$ which lead to-
Monopoly of USA
Deficit in U.S. balance of payment.
Problem in international liquidity
Value of SDR
It is determined by the basket of currencies.
The U.S. dollar value of SDR is posted daily on IMF website
Calculation
It is calculated as sum of specific amount of four currencies valued
In U.S. dollars on the basis of exchange rates the basket is reviewed in every five years.
The most recent review of SDR valuation took place in October 2000
SDR’s Failure
Problem of international liquidity was not solved
All major currencies shifted to floating exchange rate regime