There are many roles and uses of Special Drawing Rights which created by IMF. In 1969, it is used to maintain the constant exchange rate system that was set by the Bretton Woods. IMF’s member countries who want to participate in this system needed official reserves from government or central bank holdings of gold. Not only that, they should buy the domestic currency by using the foreign currencies in foreign exchange markets. This can maintain and sustain their exchange rates. However, the Bretton Woods system collapsed after a few years later. This had caused there was a floating exchange rate in the major currencies.

Besides, SDR can be used to balance the accounts of the participants. This can achieve the requirement for supplementing to current reserve. If the IMF’s members want to achieve the requirement, the SDR can be used to obtain foreign exchange. This transaction can be done by designation by IMF of one member to another member to exchange the SDR to freely usable currency. The designation is based on the conditions of their payment’s balance and reserve positions. There is a limitation for the member to provide currency although there is an agreement to set a higher limit by the IMF and members. The holding of SDR should not more than three times.

Furthermore, SDR is also used to settle financial obligations. The member countries can get the loans from SDR at the agreed maturities date and interest rates. After that, the countries should repay the loans and payment of interest with SDR.

Other than the uses above, there are two ways that the SDR can perform as the protection for the financial requirements. To discuss about it, first, the participants may allocate the SDR for the time period that had promised before by recorded it in a register. Besides, the second way is the participants may have the same opinion that SDR would perform as the protection for the financial requirements and the transferor would receive back the SDR when the requirement had been achieved.