Abstract

The special drawing right is an international reserve asset created by the IMF following the First Amendment of the Articles of Agreement in 1969. It was created as a supplement to existing reserve assets and is allocated by the IMF to members participating in the SDR Department (currently all members). Its value as a reserve asset derives, essentially, from the commitments of participants to hold and accept SDRs and to honor various obligations connected with its proper functioning as a reserve asset. Thus, the functioning of the SDR Department, like that of the General Department, is based on the principle of mutuality and intergovernmental cooperation.