Basket Village USA
The International Monetary Fund (IMF) raised the weighting of the dollar and Chinese yuan in its basket of special drawing rights (SDRs) following a review of the currencies that make up the international reserve asset.
The IMF raised the weighting of the US currency to 43.38% from 41.73% and that of the yuan to 12.28% from 10.92%. Euro weighting fell to 29.31% from 30.93%, yen fell to 7.59% from 8.33% and sterling fell to 7.44% from 8.09% .
The review of the special drawing rights basket is the first since the Chinese yuan, also known as the renminbi, joined the currency basket in 2016 in what marked a milestone in Beijing’s bid to internationalize its currency.
The IMF said in a statement that its executive board determined the weighting based on developments in trade and financial markets from 2017 to 2021.
“Directors agreed that neither the Covid-19 pandemic nor fintech advancements have had a major impact on the relative role of currencies in the SDR basket so far,” the IMF said.
Although the value of the yuan has recently fallen, it has risen around 2% against the dollar since 2016 and appreciated around 6% against its major trading partners.
In a statement on Sunday, the People’s Bank of China said China will continue to promote reform and opening up of its financial market.
The updated weightings go into effect August 1.
- Reuters with additional editing by Jim Pollard
