Egypt is among the countries that stand to benefit the most from an International Monetary Fund (IMF) proposal to earmark another $500 billion in Special Drawing Rights (SDRs) — the IMF’s artificial currency made up of unequal parts USD, EUR, RMB, JPY, and GBP, Barclays said in a note on Sunday, according to Bloomberg.
The business information service says the SDRs could help countries including Bahrain, Saudi Arabia and South Africa cushion their FX reserves. Emerging market countries would only account for $206 billion of
What exactly are SDRs, again? SDRs act as a kind of international reserve currency or asset designed to act as a supplement to IMF member countries’ reserves.
They were created in 1969 to create an alternative to gold and U.S. dollar as the only two global reserve assets. While not currencies in themselves, SDRs are held by the fund’s member countries as a way to hedge against their reliance on costly debt to build up stocks of foreign reserves.