African Development Bank Meeting- Side Session
Event Details
One main purpose of the SDRs is to boost country reserves, in budget support, or reduce the country's public debt. Generally, SDRs are a very adaptable financial instrument that serves purposes other than operating as a reserve asset. Several economies, notably Zimbabwe, Tanzania, Nigeria, Mauritania, and Chad utilised a substantial portion or all of their SDR allotment for fiscal purposes during the global financial crisis in the year 2021. African countries are primarily utilising SDRs to reduce spending deficits, aid in the recovery and pandemic response, pay off debt and accumulate foreign reserves. SDRs and foreign currencies are interchangeable, allowing countries to utilise SDRs to bolster reserves while paying for imports with other foreign currency reserves for instance the case in, Angola, Ethiopia, and the DRC.