The IMF's board of governors and alternate governors is empowered to make the decision to create SDRs.
SDRs are used mostly for repayment of IMF loans.
Creation of SDRs is limited by the IMF constitution to times when there is a long-term global reserve shortage.
Most staff members work at IMF headquarters in Washington, D.C.
SDRs SDR stands for special drawing rights. They are a product of the International Monetary Fund. Originally, when exchange rates were fixed, countries had to hold reserves of gold (or hard currency) against their currency outstanding in order for their currency to be exchangeable. There wasn't enough gold to serve this purpose, so the IMF created SDRs. SDRs represent "shares" in a basket of hard currencies. (Today those are the euro, yen, British pound, and U.S. dollar.) When first used, 1 SDR equaled 1 US dollar which equaled just under 1 gram of gold.
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The article 8 of the IMF includes the general obligations of its members.
Countries with strong currencies agreed to buy SDRs when needed by a country because of payment problems, and in turn sell other currencies.
At least annually, a team of IMF staff members visits each member country for two weeks.
The IMF encourages such countries to restructure their economies to create better economic conditions and better balance of payment conditions.
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A small number of staff members are assigned to offices in Geneva, Paris, and Tokyo and at the United Nations.