For Immediate Release: October 17, 2025
Washington, DC — A new working paper shows how an International Monetary Fund (IMF) playbook could boost the global economy by providing guidance to countries on how best to maximize use of the Special Drawing Rights (SDRs) they receive, clarifying that SDR allocations are not debt, reframing SDRs as trade promotion instruments, and proposing automatic SDR allocations that would ensure countries’ reliable access to liquidity in contexts of global debt problems, economic slowdowns or shocks, or financial crises. The brief, produced by the Center for Economic and Policy Research (CEPR) and the Red Latinoamericana y del Caribe por Justicia Económica, Social y Climática (Latindadd), follows a call for such a playbook that originated from this summer’s International Conference on Financing for Development (FfD) in Seville. A consensus-based outcome document at FfD reaffirmed the need for a renewed global framework for development financing.
“SDRs are a uniquely powerful tool,” Andrés Arauz, CEPR Senior Research Fellow and author of the working paper, said. “A new SDR issuance would provide hundreds of billions of dollars to help developing countries purchase more goods and services, including from the US, without costing the US a dime.”
The working paper echoes calls from 70 civil society organizations this week for the IMF to answer the call from FdD and design an SDR playbook. Signers to that open letter, which was sent to the IMF Executive Board on Monday, include Oxfam, ActionAid USA, Christian Aid, Latindadd, CEPR, the Bretton Woods Project, CAFOD, Bread for the World, Eurodad, and Partners In Health, among many others.
The working paper outlines three powerful policy options that follow through on this mandate and unlock SDRs’ potential: first, by framing them as a tool for mitigating trade crises; second, by establishing a preapproved, contingent mechanism to provide timely liquidity in the face of financial crises (thereby overcoming the harmful delays seen in past issuances); and third, by urging the IMF to be flexible and respectful of countries’ sovereign right to apply their own accounting practices to better use SDRs to address ongoing debt crises.
SDRs are an international reserve asset created by the IMF and distributed to member governments. They are not a currency, but under IMF rules, member countries that need hard currency (e.g., dollars, euros) can exchange them for these currencies.
“Much can be done with current holdings of SDRs, but it is being held back by counterproductive accounting rules,” Arauz said. “An SDRs Playbook would help to unleash their full potential, including as a trade deficit cutting tool for the US and an automatic stabilizer for developing countries in cases of crises.”
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