The IMF increases the weighting of the dollar and the yuan in the basket of the SDR

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

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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd newspapers in Sydney, Perth, London and Melbourne before touring South East Asia in the late 1990s. leader of The Nation for over 17 years and has a family in Bangkok.

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