definitions Special Drawing Right (SDR)

Special Drawing Right (SDR)

Originally intended within the IMF as a sort of international money for use among central banks pegging their exchange rates, the SDR is a transferable right to acquire another country's currency. Defined in terms of a basket of currencies, today it plays the role in that form of a unit of international account. An international reserve created by the International Monetary Fund and allocated to member countries to supplement foreign exchange reserves. A new form of international reserve assets, created by the IMF in 1967, whose value is based on a portfolio of widely used currencies.