Make SDRs the Main International Reserve Asset

André ICARD Directeur général honoraire, Banque de France ; ancien directeur général adjoint, Banque des règlements internationaux. Contact : andreicard@wanadoo.fr.

This article aims at showing that, with limited institutional efforts, SDRs could be given a more prominent place within central bank international reserves and that such an evolution could generate a significant improvement in the functioning of the International Monetary System.

In contradiction with the ambitions laid out in the IMF Articles, SDRs have so far played a very limited role in international reserve composition. Yet, it proves to be a good instrument and using it more intensively could both facilitate the management of the global liquidity and alleviate the “Triffin dilemma”. However this would imply to make it more user- friendly and to transform it in a full-fledged market instrument, especially with the development of a specific market and the creation of a link between “Official” and “Private” SDRs. Even though such an evolution would necessitate no or a limited set of institutional arrangements, a good deal of political will would be required.