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HE increasing variability in the value of the U.S. dollar in foreign exchange markets has recently been the basis for discussion about the currency in which certain internationally traded commodities are priced. In particular, petroleum exporting countries have given some consideration to the feasibility of (lenominating the world price of oil in terms of the Special Drawing Right (SDR), rather than the U.S. dollar.’ The primary function of the SDR, however, is not that of an international numeraire. Rather, the SDR was created in the late 1960s to augment what was then generally perceived to he a deficiency of international reserves.

International Reserves and the Role of Special Drawing Rights