expected to maintain their XDR holdings at a certain level, but penalties for holding fewer than the allocated amount are now less onerous. The name may actually derive from an early proposal for IMF "reserve drawing rights". The word "reserve" was later replaced with "special" because the idea that the IMF was creating a foreign exchange reserve asset was contentious. History Special drawing rights were created by the IMF in 1969 and were intended to be an asset held in foreign exchange reserves under the Bretton Woods system of fixed exchange rates. After the collapse of that system in the early 1970s, the XDR has taken on a less important role. Acting as the unit of account for the IMF has been its primary purpose since 1972. The IMF itself calls the current role of the XDR "insignificant". Developed countries, who hold the greatest number of XDRs, are unlikely to use them for any purpose. The only actual users of XDRs may be those developing countries that see them as "a rather cheap line of credit". One reason XDRs may not see much use as foreign exchange reserve assets is that they must be exchanged into a currency before use. This is due in part to the fact private parties do not hold XDRs: they are only used and held by IMF member countries, the IMF itself, and a select few organizations licensed to do so by the IMF. Basic functions of foreign exchange reserves, such as market intervention and liquidity provision, as well as some less prosaic ones, such as maintaining export competitiveness via favorable exchange rates, cannot be accomplished directly using XDRs. This fact has led the IMF to label the XDR as an "imperfect reserve asset". Another reason they may see little use is that the number of XDRs in existence is relatively few. As of January 2011, XDRs represented less than 4% of global foreign exchange reserve assets. To function well a foreign exchange reserve asset must have sufficient liquidity, but XDRs, because of their small number, may be perceived to be an illiquid asset. The IMF says, "expanding the volume of official XDRs is a prerequisite for them to play a more meaningful role as a substitute reserve asset." Alternative to U.S. dollar The XDR comes to prominence when the U.S. dollar is weak or otherwise unsuitable to be a foreign exchange reserve asset. This