Basically, It's About What is Special Drawing Rights And how IMF regulates them.

1. Special Drawing Rights
Presented By Gajjar Meet

2. CONTENTS
1. What is SDR
2. History of SDR
3. SDR Allocation & Valuation
4. SDR Interest rate
5. Use of SDR
6. Limitation of SDR
7. Borrowing of India
8. Reference

3. What is SDR ?
• Special Drawing Rights are international reserve assets created by IMF
to supplement the official reserves of member countries.
• SDRs were created by the IMF in 1969.
• They were issued to supplement a shortfall of preferred foreign
exchange reserve assets, namely gold and the US dollar.
• They were allocated to participating members in portion to their fund
quotas.
• SDRs are denoted with the ISO 4217 currency code XDR.

4. History of SDR
• The Bretton Woods Conference
• Main Conference Agreements
• Fall of Bretton Woods
• Balance of Payment Crisis

5. SDR Allocation & Valuation
• The value of the SDR initially defined as
0.888671 grams of fine gold = 1 U.S.
Dollar. Now 1.4 USD = 1 XDR (*This
value change daily)
• After the collapse of the Bretton Woods
system in 1973 SDR was redefined as a
basket of currencies.
• Basket Consists of 1) U.S. Dollars, 2)
Euro, 3)Chinese yen, 4)Japanese yen and
5) Pound Sterling

6. SDR Allocation & Valuation

7. SDR Interest rate
• Interest charged to members on regular IMF loans
• Interest paid and charged to members on their SDR holdings and
charged on their SDR allocations.
• Interest paid to members on a portion of their quota subscriptions.
• SDR interest rate is determined weekly.

8. Use of SDR
• For balance of payments settlement among the members.
• Used for transaction with fund.
• SDR denominated bank deposits and loans have been offered in
private financial markets.
• International Organizations using SDR 1) Japan external trade
organization, 2) Islamic development bank, 3) African development
bank, 4) Asian development bank, 5) international fund for
agricultural development

9. Limitation of SDR
• Dollar centered system,It gives too much importance to USD.
• Deficit of USD.
• High cost of shifting

10. Borrowings by india
• India’s old quota (2010) in the IMF was SDR 5821.50 million and
shareholding of 2.44%.
• Now India's current quota (2020) in the IMF is SDR 13114.4
million(17.94 billion= 650 billion USD) and shareholding is 2.76%.
• 8th largest quota
• India borrowed SDR 3.9 Billion during 1981-84 then borrowed SDR
3.56 billion in BOP crisis during 1991-93, repayment completed on
May 31, 2000
• India is now a contributor to the IMF.
• Union Finance minister or governor of RBI represent India in IMF

11. Reference
• https://www.imf.org/en/About/FAQ/special-drawing-right
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• https://encrypted-
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12. Thank You