Why would the ADB Hold SDR Instead of Dollar or Euro
SDR EXCHANGE RISK
The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official reserves. … The value of the SDR is based on a basket of five currencies—the U.S. dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling.
The Asian Development Bank (ADB), a multilateral development bank owned by its 67 members whose primary goal is poverty reduction, makes its loans in SDR. As of January 2014, these loans totaled 21.02 Billion with the largest borrowers being India, Pakistan, China, Vietnam, and Indonesia. The ABD covers the exposure of its capital resources by selling into the forward market the currencies that make up the SDR basket. (To learn more about SDR basket visit http://imf.org/external/np/fin/data/rms_sdrv.aspx)
Questions
1-why would the ADB Hold SDR Instead of Dollar or Euro?
2-What are the currency amount that make up the SDR?
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