SDR is a unit of account created by the International Fund.

SDR was first issued in 1969. It is a book asset allocated by the International Monetary Fund according to the share subscribed by member countries, which can be used to repay IMF debts and make up the balance of payments deficit among member governments. Its value is determined by a basket of reserve currencies consisting of USD, EUR, RMB, JPY and GBP.

when a member country has a balance of payments deficit, it can be used to exchange foreign exchange with other member countries designated by the IMF to pay the balance of payments deficit or repay the IMF loan, and it can also serve as an international reserve like gold and freely convertible currencies.

Purpose of the International Monetary Fund:

To promote international monetary cooperation through a permanent institution and provide methods for consultation and collaboration on international monetary issues; Through the expansion and balanced development of international trade, the primary goal of economic policy is to promote and maintain the employment, the development of production resources and the level of real income of member countries; Stabilize the international exchange rate, maintain orderly exchange rate arrangements among member countries, and avoid competitive exchange rate depreciation.

Assist member countries to establish a multilateral payment system for current transactions and eliminate foreign exchange controls that hinder world trade; Under the condition of proper guarantee, the IMF temporarily provides ordinary funds to member countries, so that they are confident to take this opportunity to correct the imbalance of international payments without taking measures that endanger their own or international prosperity.