SDRs were created to address the need for a more stable and flexible international monetary system, and to supplement existing reserve assets such as gold and foreign currencies.

SDRs are issued by the International Monetary Fund (IMF), a specialized agency of the United Nations responsible for promoting international monetary cooperation and exchange rate stability.

The value of SDRs is determined by a basket of major currencies, known as the SDR basket, which includes the US dollar, the Euro, the Japanese Yen, the British Pound, and the Chinese Renminbi.

SDRs are allocated to member countries based on their economic size and their contribution to the IMF, as determined by their quota in the IMF.

Member countries can use SDRs to settle international payments and obligations, to supplement their foreign exchange reserves, and to provide financial assistance to other countries.

SDRs play a multifaceted role in the global monetary system, promoting exchange rate stability, providing a unit of account for international transactions, and facilitating international trade and investment.

SDRs were first created in 1969 as part of the broader reforms of the international monetary system known as the Bretton Woods system.

SDRs have been allocated four times since their creation: in 1970, 1979, 1981, and 2009.

As of 2023, the total amount of SDRs in existence is approximately 600 billion SDRs.

The United States holds the largest share of SDRs, followed by China, Japan, and Germany.

SDRs can be exchanged for other currencies through authorized dealers, typically central banks and commercial banks.

The interest rate on SDRs is determined by the IMF and is based on a weighted average of short-term interest rates in major financial centers.

SDRs are subject to exchange rate fluctuations because their value is determined by a basket of currencies, and the exchange rates between these currencies can fluctuate.

SDRs cannot be used directly to purchase goods and services. They are primarily used for international financial transactions and as a reserve asset.

SDRs are expected to continue playing an important role in the global monetary system, providing liquidity, supplementing reserve assets, and facilitating international transactions.