Why is SDR called paper gold?

In 1967, as per the suggestions of Robert Triffin a new 'reserve asset' called the Special Drawing Rights (SDRs) were created under the control of IMF. SDRs represent a claim on currency by the IMF member countries and these countries could obtain hard currency against the SDRs. They are also known as paper gold because they are simply accounting entries that are defined in terms of gold. Originally, 35 SDRs equaled one ounce of gold.  

  • -2
What are you looking for?