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What is the Special Drawing Right? How was it created?
What is the Special Drawing Right? How was it created?
The Special Drawing Right is sometimes called paper gold and used to settle official transactions at the IMF.With the increase of foreign dollar holdings to finance trade expansion, the faith of dollar holders decreased in the ability of the United States to redeem the dollar for gold. To reduce the demand for the dollar as a reserve currency, the Special Drawing Right was created.
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