The COVID-19 pandemic has led to a variety of efforts to ensure that low- and middle-income countries have access to sufficient resources to import necessities like food, medicine, and personal protective equipment. One of those efforts involves an issuance of Special Drawing Rights, or SDRs, to the 190 member countries of the International Monetary Fund (IMF).
SDRs are a reserve asset issued by the IMF to its member countries. Governments can exchange SDRs that they are holding for hard currencies, most often the dollar or euro. The main advantage of using a new issuance of SDRs during the pandemic, in order to help individual countries in need, as well as to stabilize the world economy, is that the process is simple and can be relatively quick. An IMF issuance of SDRs does not cost the United States — or any IMF member country — anything.
Despite the fact that SDRs were successfully issued and used during the world recession of 2009, they are still not a well-known policy tool among US legislators. This can lead to misconceptions regarding the nature of SDRs, how they are used, and what countries they can help. Launch the fact-check below.