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IMF & Special Drawing Rights (SDR) GK Questions & Answers
The International Monetary Fund (IMF), established under its Articles of Agreement on December 27, 1945, maintains international monetary stability and provides financial assistance to member states facing balance-of-payments crises. Operations are anchored by the IMF Quota System, where each member's subscription determines its financial commitment, maximum borrowing capacity, and voting weight. Quotas are calculated through a weighted formula reflecting gross domestic product (50%), economic openness (30%), economic variability (15%), and official international reserves (5%). In 1969, the IMF created the Special Drawing Right (SDR, ISO currency code XDR) via the First Amendment to the Articles of Agreement as an international supplementary reserve asset to supplement member countries' official reserves. Valued using a basket of five freely usable currencies reviewed quinquennially, the current SDR basket comprises the United States dollar, the euro, the Chinese renminbi (included on October 1, 2016), the Japanese yen, and the British pound sterling. With 190 member nations, structural governance decisions require an 85% supermajority, granting the United States an effective unilateral veto power with its 16.5% voting share.
High-yield conceptual summaries for competitive exams and rapid revision.
The International Monetary Fund (IMF) was formally established on December 27, 1945, when 29 founding member states ratified its Articles of Agreement.
Membership in the IMF currently stands at 190 countries, following the formal admission of the Principality of Andorra in October 2020.
Every IMF member is assigned a financial quota upon admission, which dictates its financial contribution, voting weight, and maximum access to Fund financial resources.
The IMF quota formula calculates subscriptions using a weighted average of GDP (50%), trade openness (30%), economic variability (15%), and international foreign reserves (5%).
Quota subscriptions are paid 25% in Special Drawing Rights or designated hard reserve currencies (Reserve Tranche) and 75% in the member state's domestic currency.
The Reserve Tranche Position (RTP) represents an unconditional line of credit that a member nation can draw upon immediately without interest or policy conditionality.
In 1969, the IMF created the Special Drawing Right (SDR) under the First Amendment to its Articles of Agreement as an interest-bearing international reserve asset.
The SDR is not a currency nor a direct claim on the IMF, but rather represents a potential claim on the freely usable currencies of participating IMF member states.
The SDR valuation basket is reviewed every five years by the IMF Executive Board to calibrate the relative weighting of leading global trade and reserve currencies.
The Chinese renminbi (RMB) was formally inducted into the elite SDR currency basket on October 1, 2016, joining the US dollar, euro, Japanese yen, and British pound sterling.
In the 2022 SDR basket review, weights were fixed at 43.38% US dollar, 29.31% euro, 12.28% Chinese renminbi, 7.59% Japanese yen, and 7.44% British pound sterling.
Major structural policy amendments and quota reallocations within the IMF require an 85% supermajority of total voting power across all member governors.
With approximately 16.5% of total voting power, the United States maintains an effective unilateral veto over fundamental institutional decisions and quota revisions.
The IMF conducts mandatory annual bilateral economic consultations with every member nation under Article IV of its Articles of Agreement.
In August 2021, the IMF executed its largest-ever SDR allocation, injecting $650 billion (SDR 456 billion) into global liquidity to assist members combating pandemic shocks.
The Special Drawing Right (SDR) is an international reserve asset created in 1969 to supplement member countries' official reserves by which organization?
Verified Explanation
The SDR is an interest-bearing international reserve asset created by the IMF in 1969 to supplement its member countries' official reserves.
2ID: GK-INTORG-00786
hardBretton Woods Institutions: World Bank & IMF
In August 2021, the International Monetary Fund executed the largest single general allocation of Special Drawing Rights (SDRs) in its history, injecting global liquidity of what magnitude?
Verified Explanation
On 2 August 2021, the IMF Board of Governors approved a historic general allocation of Special Drawing Rights (SDRs) of SDR 456 billion, equivalent to approximately US$ 650 billion. Becoming effective on 23 August 2021, this allocation provided unconditional reserve assets to member countries to address the severe economic and liquidity fallout caused by the COVID-19 pandemic.
3ID: GK-INTORG-00887
easyBretton Woods Institutions: World Bank & IMF
In August 2021, the Board of Governors of the IMF approved the largest general allocation of Special Drawing Rights (SDRs) in the Fund's history to support global liquidity during the COVID-19 pandemic, amounting to approximately how much?
Verified Explanation
On August 2, 2021, the Board of Governors of the IMF approved a historic general allocation of Special Drawing Rights (SDRs) equivalent to SDR 456 billion (approximately US$650 billion), which took effect on August 23, 2021. This was the largest SDR allocation in the IMF's history, designed to bolster global liquidity, build confidence, and assist countries in combating the economic fallout of COVID-19.
4ID: GK-INTORG-00540
easyWorld Bank IMF
Special Drawing Rights (SDRs), created by the International Monetary Fund in 1969 as an international reserve asset, represent what type of financial instrument?
Verified Explanation
SDRs are not a physical currency or claim on the IMF, but a potential claim on the freely usable currencies of IMF members; the SDR basket comprises the US Dollar, Euro, Chinese Renminbi, Japanese Yen, and British Pound.
5ID: GK-INTORG-00023
mediumWorld Bank & IMF (Bretton Woods)
The 'Special Drawing Rights' (SDR) is an international reserve asset created in 1969 by which organization?
Verified Explanation
The SDR basket is based on five major currencies: US Dollar, Euro, Chinese Renminbi, Japanese Yen, and British Pound.
6ID: GK-INTORG-00082
easyWorld Bank Imf
The "Special Drawing Rights" (SDR) currency basket of the IMF consists of how many major global currencies?
Verified Explanation
The Chinese Renminbi (Yuan) was formally added to the SDR basket in October 2016 alongside USD, EUR, JPY, and GBP.
7ID: GK-INTORG-00159
easyWorld Bank Imf
Special Drawing Rights (SDRs), supplementary foreign exchange reserve assets, were created in 1969 by which international financial institution?
Verified Explanation
The IMF created the SDR as an international reserve asset to supplement member countries' official reserves in the context of the Bretton Woods fixed exchange rate system.
8ID: GK-INTORG-00193
hardWorld Bank Imf
Which five currencies currently comprise the valuation basket of the International Monetary Fund's Special Drawing Rights (SDR)?
Verified Explanation
The IMF SDR basket was expanded on October 1, 2016, to include the Chinese Renminbi alongside the US Dollar, Euro, Japanese Yen, and British Pound.
9ID: GK-INTORG-00227
mediumWorld Bank Imf
Special Drawing Rights (SDRs), an international supplementary reserve asset created by the IMF in 1969, have their value calculated based on a weighted currency basket containing how many currencies?
Verified Explanation
Since October 2016, the SDR basket comprises five major currencies: US Dollar, Euro, Chinese Renminbi (Yuan), Japanese Yen, and British Pound Sterling.
10ID: GK-INTORG-00293
hardWorld Bank IMF
In October 2016, which national currency became the fifth currency to be formally included in the IMF's Special Drawing Rights (SDR) valuation basket, joining the USD, EUR, JPY, and GBP?
Verified Explanation
The IMF Executive Board decided in November 2015 to include the Chinese Renminbi in the SDR basket, taking effect on October 1, 2016 after meeting freely usable criteria.