01921cas a2200253 a 4500 AALejournalIMF002242 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451875126 1018-5941 BD-DhAAL BD-DhAAL Polak, J. International Liquidity and the Role of the SDR in the International Monetary System / J. Polak, Peter Clark. Washington, D.C. : International Monetary Fund, 2002. 1 online resource (29 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper describes how the changed conditions in the international monetary system have undermined the role originally envisaged for the SDR. It argues that the concept of a global stock of international liquidity, which was fundamental to the creation of the SDR, is now no longer relevant. Nonetheless, there are good reasons to satisfy part of the growing demand for international reserves with SDR allocations: (i) there are efficiency gains, as SDRs can be created at zero resource cost, and thus obviate the need for countries to run current account surpluses or engage in expensive borrowing to obtain reserves, and (ii) there would be a reduction in systemic risk, as SDRs would substitute to some extent for borrowed reserves, which are less reliable and predictable source of reserves, especially in times of crisis. Mode of access: Internet Clark, Peter. IMF Working Papers; Working Paper ; No. 2002/217 Full text available on IMF http://elibrary.imf.org/view/journals/001/2002/217/001.2002.issue-217-en.xml IMF e-Library