CAF becomes authorized holder of IMF Special Drawing Rights
February 21, 2023
The Executive Board of the International Monetary Fund (IMF) approved the application by CAF—development bank of Latin America—to become an authorized holder of Special Drawing Rights (SDRs), an international reserve asset created by the IMF to help meet the world’s long-term need to supplement international reserves. There are currently twenty holders of IMF special drawing rights, including some of the world’s leading multilateral institutions.
SDRs are an international reserve asset created by the IMF back in 1969 to supplement other reserve assets of member countries. These are now contributing to greater liquidity in the global economic system to foster a sustainable and resilient global recovery.
Holders of SDRs may exchange them for foreign currency through voluntary exchange between members, and also use them in certain operations, including loans, settlement of financial obligations, swaps, pledges, transfers as collateral for the fulfillment of certain financial obligations, forward contracts, and donations.
This represents a major milestone for CAF, as it constitutes a new alternative to support operations in its shareholder countries. For more than three decades, CAF has followed a strategy of diversifying its financing sources through an uninterrupted presence in global capital markets, in an attempt to foster sustainable development and regional integration through funds mobilization.