Biden bans the exchange of special borrowing rights with Russia and Belarus

5 October 2022, 11:19 AM
Joe Biden (Photo:REUTERS/Elizabeth Frantz)

Joe Biden (Photo:REUTERS/Elizabeth Frantz)

The U.S. Treasury Department has been prohibited from engaging in any transactions involving the exchange of Special Drawing Rights held by Russia or Belarus, according to a law signed into power by U.S. President Joe Biden on Oct. 4.

Special Drawing Rights are “an international reserve asset created by the IMF to supplement the official reserves of its member countries,” according to the International Monetary Fund, and are not currency, but “a potential claim on the freely usable currencies of IMF members.” SDRs can be used to pay off debts to institutions that accept them, or converted into currency.

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The new law also comes the Treasury to “take measures to counter support for Russia and Belarus.”

The law will be in force for five years after its adoption. Also, its application may be terminated ahead of schedule if the U.S. President confirms to Congress that Russia and Belarus have "stopped destabilizing activities in relation to the sovereignty and territorial integrity of Ukraine."

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