The International Monetary Fund (IMF) has raised the weighting of China’s yuan and the dollar in its Special Drawing Rights (SDR) basket following a review of the currencies that make up the international reserve asset.
The IMF raised the US currency’s weighting to 43.38% from 41.73% and the yuan to 12.28% from 10.92%. The euro’s weighting declined to 29.31% from 30.93%, the yen’s fell to 7.59% from 8.33% and the British pound fell to 7.44% from 8.09%.
The review of the Special Drawing Rights basket is the first since China’s yuan, also known as the renminbi, joined the basket of currencies in 2016 in what was a milestone in Beijing’s bid to internationalise its currency.
The IMF said in a statement its executive board had determined the weighting based on trade and financial market developments from 2017 to 2021.
“Directors concurred that neither the Covid-19 pandemic nor advances in Fintech have had any major impact on the relative role of currencies in the SDR basket so far,” the IMF said.
Although the yuan’s value has declined recently, it has risen roughly 2% against the dollar since 2016, and appreciated about 6% against its major trading partners.
In a statement on Sunday, the People’s Bank of China said China will continue to promote the reform and opening of its financial market.
The updated weightings take effect on August 1.
- Reuters with additional editing by Jim Pollard