What are Special Drawing Rights in Forex Trading?

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These are supplementary foreign exchange reserves maintained by International monetary Fund. It represents a claim that currency of member countries of IMF may be exchanged. The special drawing rights were shaped in 1969 to increment a deficit of preferred foreign exchange reserve assets namely US dollar and Gold.

The currency code for special drawing rights is XDR and numeric code is 960. SDR are only allocated to member countries of IMF and cant used by the private parties. In August 2019, foreign reserve of SDR were around XDR 21.1 billion. In 2009, during the global financial crisis, additional reserves of XDR 182.6 billion were allocated in order to supplement member countries and provide liquidity to global economic system. Since the date of its creation, the XDR is comprises of five main currencies: United State dollar 41.73%, Euro 30.93%, Chinese yuan 10.92%, Japanese yen 8.33% and British pound 8.09%.

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