Special Drawing Rights (SDRs) Utilization

2030 Goals

Increase the capacity of the Resilience and Sustainability Trust (RST) and the Poverty Reduction and Growth Trust (PRGT) to manage and deploy rechanneled SDRs.
Identify and utilize alternative prescribed holders, beyond the IMF, to rechannel SDRs for more innovative uses.
Explore the potential for periodic allocations of SDRs and consider decoupling SDRs from IMF quotas.
The IMF 2030 Action Agenda includes reforms that aims to increase the scope and efficiency of re-channeling SDRs.

Recent developments in SDRs include the IMF's historic USD 650bn allocation in August 2021 to provide global liquidity during the COVID-19 pandemic.
The IMF's Resilience and Sustainability Trust uses SDRs to support low-income and vulnerable middle-income countries in addressing climate change challenges.
Efforts are also underway to reallocate unused SDRs from advanced economies to vulnerable countries by the G20. Also, the MDBs, such as the AfDB, advocate for SDR reallocations to boost their lending capacity for sustainable projects.
In a significant development in May 2024, the IMF approved the use of SDRs for the acquisition of hybrid capital. This decision allows member countries to use their SDRs to invest in financial instruments that possess both equity and debt characteristics, issued by prescribed holders.
SDRs can be an important innovative finance tool in addressing global climate challenges but changes are required to current SDR accounting systems. Current SDR accounting rules prevent their use as fiscal resources or as MDB capital. Reform proposals address the need for SDRs to be counted as net assets for government enabling countries to further expand their fiscal space to meet climate financing needs without impacting their overall debt ratios.

Multilateral Development Banks

World Bank, African Development Bank (AfDB), Inter-American Development Bank (IDB)

International Organizations

International Monetary Fund