What is sdr meaning?

SDR stands for Special Drawing Rights and is an international reserve asset created by the International Monetary Fund (IMF) in 1969. It was created as a supplement to member countries' official reserves and provides liquidity to the global financial system. The value of an SDR is based on a basket of major international currencies - the US dollar, Euro, Chinese yuan, Japanese yen, and British pound sterling. The basket is reviewed and adjusted every five years to reflect changes in the global economy. SDRs are used for transactions between central banks and international organizations and can be exchanged for freely usable currencies. The use of SDRs as an alternative to traditional reserve assets is seen as a way to reduce the dominance of the US dollar in the global financial system.