Which of the following is a feature of the 'Special Drawing Rights' allocation by the IMF?
A. SDRs can be used only for domestic fiscal spending
B. A general allocation of SDRs provides unconditional liquidity to member countries in proportion to their quotas
C. SDRs are a form of private cryptocurrency
D. SDRs are only available to countries with balance-of-payments needs under strict conditionality
Answer: Option B
Solution (By JKSSB Mock Tests)
A general SDR allocation distributes new SDRs to all IMF members in proportion to their quotas, thereby increasing global liquidity without the policy conditionality attached to IMF lending programmes.
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