What are SDRs and why are they a hot topic at the IMF meeting?

The IMF is weighing whether to create $650bn in new special drawing rights (SDRs) to help the global economy weather the COVID-19 recession, but the proposal is not without controversy.

As International Monetary Fund and World Bank leaders kick off their annual spring meetings this week, there’s an acronym that’s likely to come up in a lot of their virtual conversations: SDRs, or special drawing rights. IMF managing director Kristalina Georgieva said last month that a new $650bn allocation of SDRs would give a cash injection to poorer countries without adding to their debt burdens and “also free up badly needed resources for member countries to help fight the pandemic”. The Group of Seven (G7) nations have endorsed the plan, but expanding SDRs isn’t without controversy.