De Rambures, Dominique
SDR: From a Unit of Account and a Store of Value to a Transaction Currency
Note no. 3, July 2017

Over the last ten years, the world economy has been experiencing a deep crisis – a financial crisis turned into a world crisis – the most severe since the Great Depression in the 30s which led millions of people to unemployment and misery. In order to cope with the world crisis, national governments and central banks used to get together to exchange information and cooperate through formal (IMF, World Bank, G7, 8, 20, …) and unofficial channels. Then each one got back home to run and tame the crisis as best as he could. The lack of instruments designed to operate at the level of the crisis, i.e. a worldwide crisis, did contribute to deepen and lengthen the crisis. However there exists a tool of monetary and financial stabilization: the Special Drawing Rights (SDR) issued by the International Monetary Fund (IMF). However like the former European Currency Unit (ECU) during the pre-euro period, SDR are nothing but an accounting unit to record the IMF loans to the countries running into a payment deficit or a liquidity crisis, and a reserve currency of the central banks holdings with the IMF. SDR are not yet used for business transactions. [...]

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