Its value is determined by a basket of reserve currencies, including USD, EUR, RMB, JPY and GBP. When a member country has a balance of payments deficit, it can exchange foreign exchange with other member countries designated by the IMF to pay the balance of payments deficit or repay IMF loans, and it can also act as an international reserve like gold and freely convertible currencies. Because it is a supplement to the original ordinary drawing rights of the International Monetary Fund, it is called special drawing rights. When it was first issued, each unit was equal to 0.88867 1 gram of gold, which was equivalent to the US dollar at that time. The purpose of issuing SDR is to supplement gold and convertible currencies to maintain the stability of the foreign exchange market.
1.The first crisis of the US dollar in the early 1960s exposed the major defects of the Bretton Woods monetary system centered on the US dollar, and the international monetary system based on a country's currency could not maintain long-term stability. Under this system, only gold and dollars are reserve assets. The supply of gold is very small, and the United States can only provide more dollars to the world as the international base currency through the persistent balance of payments deficit.
At that time, many countries were still in the post-war recovery period, and the labor cost was lower than that of the United States. Pegging to the dollar can stimulate exports, so most countries are reluctant to adjust their exchange rates. The absence of the global balance of payments adjustment mechanism has led to the persistent trade deficit in the United States, and people's confidence in the fixed ratio of the dollar to gold has been eroded a little. Belgian-American economist triffin named this problem "Triffin Dilemma": the world must choose between the lack of global currency liquidity and the loss of confidence in the dollar.
3. In order to maintain the operation of the Bretton Woods system, the International Monetary Fund proposed to create a supplementary international reserve asset to supplement the supply of dollars outside the United States. 1968 In March, the "Group of Ten" put forward a formal plan for SDR. But it was shelved because France refused to sign it.