Special Drawing Right

Special Drawing Rights

A reserve currency created by the International Monetary Fund to reduce the pressure on gold and the U.S. dollar in international transactions. It was established in the late 1960s and is mainly used in the IMF's internal accounting. A few currencies are pegged to the SDR; they derive their value from a currency basket consisting of the U.S. dollar, the Japanese yen, the British pound, and the euro.

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Special Drawing Right

see INTERNATIONAL MONETARY FUND.

Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

Special Drawing Right (SDR)

a monetary asset held by member countries of the INTERNATIONAL MONETARY FUND (IMF) as part of their INTERNATIONAL RESERVES. Unlike other reserve assets such as GOLD, SDRs have no tangible life of their own. They are ‘created’ by the IMF itself and take the form of book-keeping entries in a special account managed by the Fund. The SDR is valued in terms of a weighted basket of leading currencies: US dollar, UK sterling, Japanese yen, etc.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005