Institutional framework for global liquidity and development prospects

Hasanli Azar Rasim

Among the current calls for reforming the international monetary architecture, the reorganization of global reserves and liquidity systems is gaining importance. At the historical stages of the development of the global economic system, various fundamental changes were observed both in the global reserve system and in the liquidity system. The modern global liquidity system, the main contours of which were formed along with the Bretton Woods system, has undergone a number of fundamental changes over the past 50 years. The expansion of international capital flows, the formation of various cooperation frameworks at the macro and regional levels, and the accelerated development of financial markets have expanded the role of various components in providing global liquidity. In the process of the current institutional structuring of the global liquidity system, the current functionality and future prospects of Special Drawing Rights, designed as an international reserve asset, play a special role. The article analyzes the design features of Special Drawing Rights and issues of increasing their promising role in the process of institutional structuring of the global liquidity system against the background of existing functionality problems.

Keywords:Borrowing Rights, global liquidity, global reserve system, international monetary architecture, economic system