WASHINGTON, CMC –The International Monetary Fund (IMF) Tuesday announced that it had approved the Barbados-based Caribbean Development Bank (CDB) to become prescribed holders of Special Drawings Rights (SDRs), an international reserve asset created by the Fund to help meet the long-term global need to supplement reserves.
It said the CDB is among five regional and international banks, including the Development Bank of Latin America (known as Corporacion Andina de Fomento or CAF), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), and the Inter-American Development Bank (IDB), whose applications were approved on February 8.
The Washington-based financial institution said that approval of these institutions brings the number of prescribed holders to 20.
“Prescribed holders may acquire, hold and use SDRs in operations with other prescribed holders and participants in the SDR Department. The SDR Department maintains records on SDR transactions, holdings, and allocations. All IMF members are currently participants in the SDR Department,” the IMF said.
It noted that under current IMF decisions, prescribed holders might exchange SDRs for currency and use SDRs in certain operations, including loans, settlement of financial obligations, swaps, pledges, and transfers as security for performing financial duties, forwards, and donations.
It said prescribed holders might elect to participate in the SDR Voluntary Trading Agreements (VTAs) or enter into bilateral agreements to conduct their exchanges of SDRs.
“Unlike participants in the SDR Department, prescribed holders do not receive allocations of SDRs, and they may not request an exchange of SDRs in transactions with the designation.”
The IMF’s Articles of Agreement authorize the Fund to prescribe as holders of SDRs:
- Non-members.
- Members that are not participants in the SDR Department.
- Institutions that perform central bank functions for one or more IMF member countries.
- Other official entities.
“The five applicants approved are all “other official entities,” the IMF said.
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