India’s Foreign Exchange touches all time high and Special Drawing Rights
Posted on : 07 Jan 2020Views: 299
- India's foreign exchange reserves swelled by 2.520 billion USD to touch a record high of 457.468 billion USD in the week that ended on 27th December 2019.
- An RBI press release has informed that foreign currency assets, a major part of the overall reserves rose by 2.203 billion USD to 424.936 billion USD.
- India's special drawing rights with the International Monetary Fund, however dipped by 2 million USD to 1.441 billion USD,
Special Drawing Rights
- Special drawing rights (SDR) refer to an international type of monetary reserve currency created by the International Monetary Fund (IMF) in 1969 that operates as a supplement to the existing money reserves of member countries.
- Created in response to concerns about the limitations of gold and dollars as the sole means of settling international accounts, SDRs augment international liquidity by supplementing the standard reserve currencies.
- An SDR is essentially an artificial currency instrument used by the IMF, and is built from a basket of important national currencies.
- The IMF uses SDRs for internal accounting purposes. SDRs are allocated by the IMF to its member countries and are backed by the full faith and credit of the member countries' governments. The makeup of the SDR is re-evaluated every five years.
Article Related Questions
With reference to Special Drawing Rights consider the following statements
1.It refers to an international type of monetary reserve currency created by the World Bank.
2.The makeup of the SDR is re-evaluated every five years.
Which of the following statement is/are correct?
3.Both 1 and 2
4.Neither 1 nor 2
Right Ans : 2 only