Renminbi weight, U.S. dollar raised as global currency in SDRs by IMF

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In the last five-year review of the Special Drawing Right (SDR), an international reserve asset, the International Monetary Fund (IMF) increased the weight of the renminbi by 1.36 percentage points to 12.28% in the basket of currencies that make up the SDR. The weight of the US dollar was 43.38%, that of the euro 29.31%, that of the Japanese yen 7.59% and that of the pound sterling 7.44%.

The weight of the US dollar has increased by 1.65 percentage points since the last revision in 2015. The decision will take effect on August 1.

The review, completed on May 11, was the first since the renminbi was included in the SDR basket in 2016, with a 10.92 percent share, the People’s Bank of China said.

In the latest valuation review of the Special Drawing Right, an international reserve asset, the IMF raised the weight of the renminbi by 1.36 percentage points to 12.28 percent in the basket of currencies that make up the reserve. The weight of the US dollar was 43.38%, that of the euro 29.31%, that of the Japanese yen 7.59% and that of the pound sterling 7.44%.

An IMF statement said the updated SDR weights were based on developments in trade and financial markets from 2017 to 2021, with IMF executive directors acknowledging the progress made in China’s financial market reforms.

They called for additional efforts to further open and deepen the onshore renminbi market, and some also stressed the need for improved data transparency, the IMF said.

Reiterating China’s commitment to open financial markets, the PBOC pledged on May 15 to simplify procedures for foreign investors to invest in the Chinese market, expand the universe of investable assets, improve data disclosure and the business environment; and extend the trading hours of the interbank foreign exchange market.

Fibre2Fashion (DS) News Desk

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