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IMF Financial Operations

Special Drawing Rights

Heikki Hatanpaa, Christine Kadama, Bilal Khan, Nicolás Magud, Breno Oliveira, and Jane Mburu

The course begins with a background on why the SDR was created and then explains its role in the global economy and in the IMF's financial operations. It will then discuss the key characteristics of the SDR and how it is valued, covering the selection criteria for the currencies in the SDR basket and the methodology behind calculating the SDR's interest rate (SDRi). The course delves into the uses of SDRs, describes how they can be used in financial transactions between countries and how the SDR market functions. Through real-world case studies showcasing how different countries utilized their SDR allocations in 2021, participants will see the SDR's impact across various economies, making the theoretical knowledge gained from the course more tangible and applicable to practice.

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What's inside

Learning objectives

  • Upon completion of this course, participants should be able to:
  • Explain what sdrs are, why they were created, and their uses.
  • Describe the composition of the sdr basket and its valuation.
  • Discuss how member country sdr allocations and holdings are determined.
  • Explain the role of the sdr interest rate (sdri) and how it is computed.
  • Describe the various ways in which sdrs are used or could be used in transactions and operations.
  • Relate the benefits of sdrs using real-life case studies.

Good to know

Know what's good
, what to watch for
, and possible dealbreakers
Explores the role of SDRs in the global economy, which is highly relevant for economists and policymakers involved in international finance and monetary policy
Presented by the IMF, which is the leading international organization for global monetary cooperation and the stability of the international financial system
Examines the SDR interest rate (SDRi) and its computation, which is essential knowledge for finance professionals dealing with international transactions and risk management
Uses real-world case studies from 2021, which may not reflect current market conditions or policy changes, so learners should seek more up-to-date information
Discusses the uses of SDRs in financial transactions between countries, which is a niche topic that may not be broadly applicable to all finance professionals

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Activities

Be better prepared before your course. Deepen your understanding during and after it. Supplement your coursework and achieve mastery of the topics covered in IMF Financial Operations: Special Drawing Rights with these activities:
Review International Finance Concepts
Reinforce your understanding of international finance principles to better grasp the SDR's role in the global economy.
Browse courses on International Finance
Show steps
  • Review key concepts like exchange rates and balance of payments.
  • Study the role of international financial institutions.
  • Practice applying these concepts to real-world scenarios.
Read 'International Economics' by Paul Krugman
Gain a deeper understanding of international economics to contextualize the SDR's function.
View International Finance: Theory and Policy,... on Amazon
Show steps
  • Read the chapters on exchange rates and international monetary systems.
  • Take notes on key concepts and theories.
  • Reflect on how these concepts relate to the SDR.
Review 'Global Economic Institutions' by Carlo Cottarelli
Understand the IMF's role in the global economy and how the SDR fits within its operations.
View What We Owe: Truths, Myths, and Lies about... on Amazon
Show steps
  • Read the chapters related to the IMF and its functions.
  • Take notes on the IMF's role in global financial stability.
  • Reflect on how the SDR contributes to the IMF's mission.
Four other activities
Expand to see all activities and additional details
Show all seven activities
Explore IMF Resources on SDRs
Familiarize yourself with the IMF's official documentation and resources on the Special Drawing Right.
Show steps
  • Visit the IMF's website and search for information on SDRs.
  • Review official publications and reports related to SDRs.
  • Watch videos or webinars explaining the SDR mechanism.
Participate in a Study Group
Enhance your learning by discussing course concepts with peers.
Show steps
  • Form a study group with other students in the course.
  • Review course materials and discuss challenging topics.
  • Share insights and perspectives on SDRs and their uses.
Create a Presentation on SDR Usage
Solidify your understanding by creating a presentation explaining how countries use SDRs.
Show steps
  • Research real-world examples of SDR usage by different countries.
  • Develop a presentation outlining the benefits and challenges of using SDRs.
  • Present your findings to peers or colleagues.
Develop a Case Study Analysis
Deepen your understanding by analyzing a specific case study of a country using SDRs.
Show steps
  • Select a country that has utilized SDR allocations.
  • Research the country's economic situation and reasons for using SDRs.
  • Analyze the impact of SDR usage on the country's economy.
  • Write a report summarizing your findings and conclusions.

Career center

Learners who complete IMF Financial Operations: Special Drawing Rights will develop knowledge and skills that may be useful to these careers:
International Economist
An international economist analyzes global economic trends and policies. This role often involves research on international finance, trade, and development. This course, with its focus on Special Drawing Rights, provides a practical understanding of a key instrument in global finance, giving an aspiring international economist insight into the mechanisms that facilitate financial transactions between countries. The course's discussion of SDR valuation, basket composition, and interest rate computation contributes to a better understanding of how global financial systems function. Real world case studies in the course will be particularly useful for this role.
See salaries and explore the career path for International Economist
Development Finance Specialist
A development finance specialist works in the realm of global development, often dealing with international financial instruments. This course on Special Drawing Rights explains how SDRs, can be used in various transactions between countries and how different economies utilize them. A development finance specialist can gain understanding of how the system works, the role of the SDR in the global economy, and its impacts through real-life case studies from this course.
See salaries and explore the career path for Development Finance Specialist
Central Banker
Central bankers play a crucial role in managing a country's monetary policy and financial stability. They often deal with international reserves and financial operations. This course on Special Drawing Rights directly addresses how SDRs are used in financial transactions between countries and explains their role in the international financial system. For an aspiring central banker, understanding the valuation, composition, and usage of SDRs presented in this course may be helpful, especially given that central banks often manage their nation's SDR holdings. Real world case studies are of particular interest for this role.
See salaries and explore the career path for Central Banker
Public Finance Manager
A public finance manager oversees the financial operations of governmental or public entities. This role requires an understanding of global financial instruments. This course on Special Drawing Rights can help a public finance manager understand the global financial system, specifically how SDRs work and how they are used in transactions between countries. The course's practical case studies, demonstrating how different countries use their SDR allocations, would be particularly relevant for this career.
See salaries and explore the career path for Public Finance Manager
Economist
Economists study economic activity, developing models and forecasts. This role may specialize in international finance, making this course on Special Drawing Rights useful. The course provides an understanding of how SDRs function as a financial instrument, how they are valued, and their role in the global economy. It explains how they are used in transactions between countries. This detailed understanding of SDR operations may be especially beneficial to this career, particularly with the case studies.
See salaries and explore the career path for Economist
Global Macro Strategist
Global macro strategists analyze economic trends and indicators to predict market movements. This role requires a deep understanding of global financial instruments. This course, focused on Special Drawing Rights, may be useful, as it provides an understanding of a key instrument used in international finance, its valuation, and its uses between countries. A global macro strategist will also benefit from the course's examination of real-world case studies.
See salaries and explore the career path for Global Macro Strategist
Financial Consultant
Financial consultants offer financial advice and strategies to organizations. This role often requires a broad understanding of various financial instruments. This course, which focuses on Special Drawing Rights, may assist a financial consultant because it covers a key component of international finance. The course explains the nature of SDRs, how they are valued, how their interest rate is calculated, and how they are used in transactions between nations. The real-world case studies in the course will be of particular interest to this role.
See salaries and explore the career path for Financial Consultant
Policy Analyst
Policy analysts research and formulate recommendations on policies, often related to economics. For a position specializing in international economics, a detailed understanding of global financial instruments is necessary. This course on Special Drawing Rights can help a policy analyst understand the role of SDRs in the global economy. The course provides background on why SDRs were created and how they are utilized in various economies, and may prove helpful in this career. The course’s examination of real case studies will be particularly relevant.
See salaries and explore the career path for Policy Analyst
Treasury Analyst
Treasury analysts manage and optimize an organization's financial assets. This involves understanding global financial systems. This course, which focuses on Special Drawing Rights, can help a treasury analyst better understand how a key international financial instrument functions. The course explains how SDRs are valued, how their interest rate is calculated, and how they are used within transactions between countries. A treasury analyst will find the real world case studies particularly relevant.
See salaries and explore the career path for Treasury Analyst
Financial Analyst
A financial analyst evaluates financial data, providing insights and recommendations to inform financial decisions. This position requires a strong understanding of financial instruments and markets. This course, focused on Special Drawing Rights, may be useful as it covers a significant component of international financial operations and transactions between countries. The course explains how SDRs are valued, how their interest rate is calculated, and how they function within the global financial system. The case studies in the course would help a financial analyst understand the practical impact of global financial tools.
See salaries and explore the career path for Financial Analyst
Investment Analyst
Investment analysts research and analyze investment opportunities. This role can benefit from understanding the complexities of international financial instruments. This course on Special Drawing Rights may be helpful because it provides a deep understanding of how SDRs function and their uses in global finance. The course explains the valuation of SDRs, how they are used in transactions between countries, and how different economies utilize them. The course's use of case studies will help an investment analyst understand the practical implications of their work.
See salaries and explore the career path for Investment Analyst
International Relations Specialist
An international relations specialist analyzes the relationships between nations, often focusing on economic and financial matters. This course on Special Drawing Rights may help an international relations specialist understand a specific global financial instrument. The course provides a background on the creation of SDRs and explains how they are used in transactions between countries. The course's case studies showing the use of SDRs in different economies, will be particularly useful in this field.
See salaries and explore the career path for International Relations Specialist
International Trade Specialist
An international trade specialist facilitates trade and investment opportunities, requiring a grasp of international financial systems. This course on Special Drawing Rights may be useful, as it explains a critical financial tool utilized in international transactions. This course provides insight into how SDRs function as a potential reserve asset and how they can be used in financial transactions between countries. The case studies in the course will help an international trade specialist understand the practical implementation of the SDR system.
See salaries and explore the career path for International Trade Specialist
Financial Risk Analyst
Financial risk analysts identify, assess, and mitigate financial risks for organizations. This course on Special Drawing Rights examines a specific component of the international financial system. By taking this course, a financial risk analyst can better understand the mechanics behind SDRs, their valuation, and their role in transactions between countries. This position may benefit from the insights provided in the course's real world case studies.
See salaries and explore the career path for Financial Risk Analyst
Financial Regulator
Financial regulators establish and enforce rules to ensure a stable financial system. This role benefits from understanding international financial tools. This course, which explains the function of Special Drawing Rights, may be useful as it provides an understanding of SDR valuation, how their interest rate is calculated, and their use in the global economy. The financial regulator role will also be able to benefit from learning about the practical applications of SDRs through the course's real-world case studies.
See salaries and explore the career path for Financial Regulator

Reading list

We've selected two books that we think will supplement your learning. Use these to develop background knowledge, enrich your coursework, and gain a deeper understanding of the topics covered in IMF Financial Operations: Special Drawing Rights.
Cover image
International Finance: Theory and Policy, Global...
Save
Provides a comprehensive overview of international trade and finance. It standard textbook used in many university courses. Reading this book will provide a solid foundation for understanding the economic principles underlying the SDR and its role in the global financial system. It is particularly helpful for understanding the macroeconomic context in which the SDR operates.
International Finance: Theory and Policy, Global...
Paperback
Check
International Finance: Theory and Policy, Global...
Kindle Edition
Check
Cover image
What We Owe
Save
Provides an overview of the roles and functions of various global economic institutions, including the IMF. It is useful for understanding the broader context in which the SDR operates. The book provides valuable insights into the IMF's governance, lending policies, and surveillance activities. It valuable resource for anyone interested in international finance and global economic governance.
What We Owe: Truths, Myths, and Lies about Public...
Kindle Edition
$$

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Effort
3 to 6 hours per week for 1 week
Level
Intermediate
Via
edX
Institution
The International Monetary Fund
Instructors
Heikki Hatanpaa
Christine Kadama
Bilal Khan
Nicolás Magud
Breno Oliveira
Jane Mburu
Session
January 1, 2025 - April 15, 2025
Language
English
Transcript
English
Good to know
Explores the role of SDRs in the global economy, which is highly relevant for economists and policymakers involved in international finance and monetary policy
Presented by the IMF, which is the leading international organization for global monetary cooperation and the stability of the international financial system
Examines the SDR interest rate (SDRi) and its computation, which is essential knowledge for finance professionals dealing with international transactions and risk management
Uses real-world case studies from 2021, which may not reflect current market conditions or policy changes, so learners should seek more up-to-date information
Discusses the uses of SDRs in financial transactions between countries, which is a niche topic that may not be broadly applicable to all finance professionals
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