Description of table L.200 - U.S. Official Reserve Assets and SDR Allocations

U.S. official reserve assets include (1) monetary gold, (2) special drawing rights (SDR) holdings, (3) the net U.S. reserve position in the International Monetary Fund (IMF), and (4) official foreign currency holdings. Transactions in international reserve assets are made among official agencies of the world's countries to settle international accounts. Also included on this table are SDR allocations.

The categories of reserve assets are described in detail as follows:

1. Monetary gold (including allocated gold accounts) consists of two subcategories, physical gold bullion and unallocated gold accounts, both of which are held by the monetary authority (or other units authorized by them) as part of reserves. Gold bullion takes the form of coins, ingots, or bars with a purity of at least 995 parts per thousand. Gold held as a valuable by commercial banks or as inventories by some specialized industries--for example, jewelers--are excluded.

At present, all U.S. monetary gold is "monetized": That is, the Treasury issues a gold certificate equal to the value of the gold to the Federal Reserve System, which increases the value of the Treasury's deposit account by the same amount. In the financial accounts, monetized gold is an asset of the monetary authority. In the past, amounts of unmonetized monetary gold have been held by the Exchange Stabilization Fund, an entity within the Treasury Department, which is part of the federal government sector.

Transactions in monetary gold consist of purchases and sales of gold among monetary authorities and are recorded in the financial account of the domestic sectors as increases (decreases) in assets, and the counterparts are recorded as decreases (increases) in assets of the rest of the world. Gold bullion held as a reserve asset is the only financial asset with no corresponding liability.

2. Official foreign exchange consists of holdings of foreign currencies by the Treasury Department and the Federal Reserve System that are used in connection with exchange market interventions, reciprocal official currency arrangements with foreign monetary authorities, foreign currency transactions with the IMF, and borrowings of foreign currencies in foreign capital markets.

3. SDRs are international reserve assets that the IMF created to supplement the reserves of IMF member countries. The SDR is neither a currency nor a claim on the IMF. Rather, it is a potential claim on the freely usable currencies of IMF members. Holders of SDRs can obtain these currencies in exchange for their SDRs in two ways: (1) through the arrangement of voluntary exchanges between members and (2) by the IMF designating members with strong external positions to purchase SDRs from members with weak external positions.

SDRs are allocated in proportion to the countries' respective quotas. SDRs are valued at an administrative rate determined by the IMF. The IMF determines the value of SDRs daily in U.S. dollars by summing the values (which are based on market exchange rates) of a weighted basket of currencies. The basket and weights are subject to revision from time to time.

SDR allocations represent the amount the federal government would owe to the IMF should the United States withdraw its membership from the IMF. Thus, in the financial accounts, SDR allocations are a net increase in federal government liabilities and net acquisition of financial assets of the rest of the world. Levels represent the accumulation of these allocations, plus changes due to the fluctuation of the exchange rate. Since 1970, there have been seven allocations of SDRs to IMF member countries in proportion to their IMF quotas, the latest allocation being made in 2009.

SDRs can be used for a wide range of transactions and operations, including for acquiring other IMF members' currencies, settling financial operations, making donations, and extending loans. SDRs may also be used in swap arrangements and as security for the performance of financial obligations. In the financial accounts, SDR holdings represent the accumulation of SDR allocations and any change in value through these transactions or operations, interest paid or received, and administrative expenses.

4. The U.S. net reserve position in the IMF is equal to the U.S. quota in the IMF minus IMF holdings of U.S. dollars (excluding dollar holdings in IMF administrative and subsidiary accounts) plus net U.S. loans to the IMF. The net reserve position represents the amount of foreign exchange that the United States may unconditionally draw from the IMF on short notice, up to the full amount of its quota.



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