Annual Update on SDR Trading Operations

September 29, 2023

Preview Citation

Format: Chicago

Annual Update on SDR Trading Operations, (USA: International Monetary Fund, 2023) accessed December 18, 2024

Summary

This paper provides an update on the status of the SDR trading market and operations. For more than three decades, SDRs have exclusively been exchanged for freely usable currencies in transactions by agreement, primarily through the Voluntary Trading Arrangements (VTAs). Since the last annual update, SDR trading has continued to be dominated by SDR sales, although SDR acquisitions have increased significantly. From September 2022 to August 2023, SDR 17.9 billion were sold through the VTA market, of which SDR 8.9 billion were exchanged by 29 participants into currencies and SDR 8.0 billion were sold by the Poverty Reduction and Growth Trust (PRGT) and the Resilience and Sustainability Trust (RST) for liquidity management and to facilitate the investment of SDR contributions. On the purchase side, the volume and number of transactions increased from the previous year as more participants needed to replenish their SDR holdings to cover charges to the IMF, reflecting the rising SDR interest rate. The VTAs continue to have ample capacities to meet the demand for exchange of SDRs into currencies.

Subject: Asset and liability management, Currencies, Freely usable currencies, International trade, Liquidity, Monetary policy, Money, Political economy, Trading arrangements

Keywords: Currencies, Freely usable currencies, IMF-administered trust, Liquidity, Middle East and Central Asia, SDR department participant, SDR sale, SDR trade, SDR trading capacity, Trading arrangements, VTA market

Publication Details

Pages:

12
Volume:

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DOI:

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Issue:

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Series:

Policy Paper No. 2023/037
Stock No:

PPEA2023037
ISBN:

9798400256868
ISSN:

2663-3493

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