Russia receives SDRs from IMF worth $18 billion

The International Monetary Fund (IMF) transferred a package of special drawing rights (SDR) worth $18 billion to Russia on Monday, August 23. The IMF made the relevant decision on August 2.

Emissions in the amount of $650 billion were distributed between countries in accordance with established quotas. The United States received the largest part - 17.4 percent, whereas Russia got 2.71 percent. All in all, the countries of the former USSR, Georgia and Ukraine received about $25 billion.

• SDRs are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund (IMF).
• SDRs are units of account for the IMF, and not a currency per se.
• They represent a claim to currency held by IMF member countries for which they may be exchanged.
• Its rate depends on the mutual exchange rate of the dollar, euro, yen, British pound and yuan.
• Prior to the current placement, there were $290 billion SDRs in circulation, so now their volume has tripled. 

Russia may add the received funds to international reserves, but it actually does not need them under current conditions. In order to receive real funds, one needs to either exchange SDRs for currency in another country, or get a loan from the IMF, but in this case, the fund will put forward certain requirements.

Another way to distribute SDRs is to join the club of states that will donate their share to other countries in need. In this case, Russian funds can be allocated, for example, to Ukraine.

Venezuela, Myanmar and Afghanistan were deprived of financial assistance in the form of SDRs for political reasons. Yet, Belarus still received $900 million, although experts expected the IMF to refuse to transfer funds to Belarus. Among CIS countries, assistance will be most beneficial for Tajikistan that will now increase its international reserves by 19 percent.