Can Special Drawing Rights Be Recycled to Where They Are Needed at No Budgetary Cost?
In this note, David Andrews looks at one mechanism that could work for using excess SDRs to the benefit of low- and middle-income countries: donating them. It is a simple idea but hardly straightforward, as he demonstrates with a “case study” of how the United Kingdom might do this. The UK’s rules governing the use of its reserves, when overlayed on the IMF’s rules surrounding SDRs, make for a difficult thicket to plow through to effect a donation of SDRs.
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