Final answer:
Special Drawing Rights (SDRs) provided by the IMF, also known as 'paper gold,' are intended to enhance global liquidity and mitigate the reliance on gold and US dollars as primary international reserves.
Step-by-step explanation:
Another term commonly used to refer to the International Monetary Fund (IMF) Special Drawing Rights (SDRs) is paper gold. SDRs were created as an international type of monetary reserve currency that operates as a supplement to the existing reserves of member countries. Introduced in 1969, SDRS serve as a claim to currency that IMF member countries can exchange, providing additional liquidity to the global economic system. The creation of SDRs was a response to concerns about the reliance on gold and the US dollar and aimed to address issues related to global liquidity and the stability of international monetary systems.
Initially, the IMF issued USD 3.5 billion in SDRs to address the problem of excessive liquidity of dollars in the world economy. Over time, as the global economy and financial architecture have evolved, so too has the role of the SDRs. Today, the SDR is more than just an international monetary asset; it also serves as the unit of account for the IMF and some other international organizations.