Special drawing rights (SDR)

The special drawing right is a reserve asset created by the International Monetary Fund in 1969, whose value is calculated daily from a basket of currencies: US dollar, euro, yuan, yen and pound sterling. Transport conventions adopted it to replace the gold franc, whose value had become uncertain after the end of dollar convertibility. The liability caps of the Montreal, Hague-Visby, CMR, CLC and LLMC conventions are thus expressed in SDR, and converted into national currency at the date of judgment or payment depending on the text. For the insurer, this unit has two consequences: a carrier's exposure varies with the exchange rate between its currency and the basket, and it changes when conventions revise their caps, sometimes automatically to track inflation, as the Montreal Convention provides every five years.