The SDR is an international reserve asset created by the IMF to supplement the official reserves of its member countries. 

The SDR is not a currency. It is a potential claim on the freely usable currencies of IMF members. As such, SDRs can provide a country with liquidity.

A basket of currencies defines the SDR: the US dollar, Euro, Chinese Yuan, Japanese Yen, and the British Pound.

The SDR is an international reserve asset created by the IMF to supplement the official reserves of its member countries. 

The SDR is not a currency. It is a potential claim on the freely usable currencies of IMF members. As such, SDRs can provide a country with liquidity.

A basket of currencies defines the SDR: the US dollar, Euro, Chinese Yuan, Japanese Yen, and the British Pound.

You can add location information to your Tweets, such as your city or precise location, from the web and via third-party applications. You always have the option to delete your Tweet location history. Learn more

Economic analysis can shine a revealing light on the causes and consequences of social unrest

The past decade was marked by a series of high-profile social protests—the Arab Spring, Black Lives Matter, the Gilets Jaunes, and Occupy Wall Street, to name just a few. Yet while there has been a lot of soul-searching about their causes and consequences, and even though many commentators have pointed their fingers at economic forces, the economics profession has been relatively slow to respond. Indeed, rigorous quantitative economic analysis of social unrest is scant, with evidence limited to isolated cases until recently. However, a new body of IMF staff research is filling this gap by analyzing the risks and economic costs of social unrest.

By Olusegun Akanbi, Kenji Moriyama, Keyra Primus

Already facing huge development needs, the COVID-19 pandemic is exacerbating the challenges facing fragile and conflict states—a group of currently about 40 countries trapped in cycles of low administrative capacity, political instability, conflict, and weak economic performance. Our new IMF staff working paper, which analyzes the experiences of 196 countries between 1979 and 2018, shines a light on how countries can avoid or break out of this trap.

As our chart of the week shows, weaker growth raises the probability of falling into fragility, particularly for countries in the middle-range of government effectiveness (measured by, e.g., the ability to collect taxes and enforce contracts). The top chart measures the change in the probability of entry into/exit from fragility when growth declines by 2 percentage points at various levels of government effectiveness. Weaker growth raises the probability of...

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Rebellion, Rascals, and Revenue: Tax Follies and Wisdom through the Ages

Michael Keen and Joel Slemrod Princeton University Press, Princeton, NJ, 2021, 511pp., $29.95

Tax history resembles the warehouse in the final scene of the movie Raiders of the Lost Ark—an enormous, poorly lit jumble of unlabeled boxes, one of which may be hiding the answer to all the world’s tax problems. This new book by two leading tax analysts turns up the lights, organizes many of the boxes in an enlightening way, and presents the results with a style and flair that make the subject not only understandable but—and this may come as a surprise to many—actually fun to read. The authors may not have found the answer, but even the most experienced reader can learn something from this lively and informative book.

This is a rare find that can and should be read and enjoyed not only by experts but by anyone who has ever had questions about taxation. As...

By Tobias Adrian and Tommaso Mancini-Griffoli

History moves in uneven steps. Just as the telegraph erased time and distance in the 19th century, today’s innovations in digital money may bring significant changes in the way we lead our lives. The shift to electronic payments and social interactions brought on by the pandemic may cause similarly rapid and widespread transformations.

August 3, 2021

The Kyrgyz Republic was the first country to receive IMF emergency funding to tackle the COVID-19 crisis. IMF Country Focus spoke with the mission chief, Nikoloz Gigineishvili, about the pandemic’s impact on the economy and how the IMF supported the recovery.

Exceptional policy support prevented a global economic depression, even as the pandemic took a heavy toll on lives and livelihoods. The global reaction, as seen in major shifts in travel, consumption, and trade, also made the world a more economically imbalanced place as reflected in current account balances—a record of a country’s transactions with the rest of the world.

In our latest External Sector Report we found that the global reaction to the pandemic further widened global current account balances—the sum of absolute deficits and surpluses among all countries—from 2.8 percent of world GDP in 2019 to 3.2 percent of GDP in 2020. Those balances are set to widen further as the pandemic continues to rage in much of the world.

If not for the crisis, global current account balances would have continued to decline. While external deficits and surpluses are not necessarily a cause for concern, excessive imbalances—larger than warranted by the economy’s...

The International Monetary Fund is preparing a Strategy to strengthen its engagement with fragile and conflict-affected states (FCS). Building on the Fund’s long-standing experience in FCS, the Strategy will further articulate the IMF’s role in helping countries to exit from fragility. It will also identify and propose specific measures to enhance the impact of the Fund’s engagement over the next three years. The Strategy is expected to strengthen the IMF’s ability to support FCS in correcting balance of payments, promoting macroeconomic stability, and building institutions to deliver good policies for sustainable and inclusive economic growth. The Strategy also seeks to complement efforts by other actors and organizations supporting FCS, focusing on the IMF’s comparative advantage. The FCS Strategy will be submitted for consideration and approval to the IMF’s Executive Board in December 2021.

Learn more about the IMF’s FCS Strategy: Download the Concept...

August 3, 2021

The Kyrgyz Republic was the first country to receive IMF emergency funding to tackle the COVID-19 crisis. IMF Country Focus spoke with the mission chief, Nikoloz Gigineishvili, about the pandemic’s impact on the economy and how the IMF supported the recovery.

By Olusegun Akanbi, Kenji Moriyama, Keyra Primus

Already facing huge development needs, the COVID-19 pandemic is exacerbating the challenges facing fragile and conflict states—a group of currently about 40 countries trapped in cycles of low administrative capacity, political instability, conflict, and weak economic performance. Our new IMF staff working paper, which analyzes the experiences of 196 countries between 1979 and 2018, shines a light on how countries can avoid or break out of this trap.

As our chart of the week shows, weaker growth raises the probability of falling into fragility, particularly for countries in the middle-range of government effectiveness (measured by, e.g., the ability to collect taxes and enforce contracts). The top chart measures the change in the probability of entry into/exit from fragility when growth declines by 2 percentage points at various levels of government effectiveness. Weaker growth raises the probability of...

By Tobias Adrian and Tommaso Mancini-Griffoli

History moves in uneven steps. Just as the telegraph erased time and distance in the 19th century, today’s innovations in digital money may bring significant changes in the way we lead our lives. The shift to electronic payments and social interactions brought on by the pandemic may cause similarly rapid and widespread transformations.

Overall current account deficits and surpluses widened in 2020 to 3.2 percent of world GDP. The IMF’s multilateral approach suggests that global excessive imbalances were broadly unchanged in 2020 at about 1.2 percent of world GDP. The external outlook for 2021 is highly uncertain given the divergent economic prospects across countries.

Unprecedented government borrowing to finance health care and economic support has had uneven effects on current account balances. The impact on the current account balances depends on a country’s relative fiscal policy stance compared with that of its trading partners.

The outlook for global current account balances is a gradual narrowing during 2022–26, mainly reflecting a narrowing of the US deficit and China’s surplus to below pre-pandemic levels. Over the medium term, collective action is needed to reduce global imbalances in a growth-friendly manner.

Despite the toll of the pandemic, smart policy making and continued access to markets allowed the country to implement a response plan that has put the Dominican Republic on a path to recovery.

Here are four questions and charts on the country’s crisis response and priorities:

Overall current account deficits and surpluses widened in 2020 to 3.2 percent of world GDP. The IMF’s multilateral approach suggests that global excessive imbalances were broadly unchanged in 2020 at about 1.2 percent of world GDP. The external outlook for 2021 is highly uncertain given the divergent economic prospects across countries.

Unprecedented government borrowing to finance health care and economic support has had uneven effects on current account balances. The impact on the current account balances depends on a country’s relative fiscal policy stance compared with that of its trading partners.

The outlook for global current account balances is a gradual narrowing during 2022–26, mainly reflecting a narrowing of the US deficit and China’s surplus to below pre-pandemic levels. Over the medium term, collective action is needed to reduce global imbalances in a growth-friendly manner.