BEIJING–The International Monetary Fund announced Saturday that it has increased weightings of the dollar and Chinese yuan in its review of currencies that make up the valuation of its Special Drawing Rights (SDR), an international reserve asset.
The review is the first since the yuan, also known as the renminbi, was added to the basket of currencies in 2016, which was a milestone in Beijing’s efforts to internationalize its currency.
The IMF increased the weighting of the US currency from 41.73 percent to 43.38 percent and the yuan from 10.92 percent to 12.28 percent. The weight of the euro fell from 30.93 percent to 29.31 percent, that of the yen from 8.33 percent to 7.59 percent and the British pound from 8.09 percent to 7.44 percent.
The IMF said in a statement its board set the weighting based on trade and financial market developments from 2017 to 2021.
“Directors agreed that neither the COVID-19 pandemic nor advances in fintech have had a major impact on the relative role of currencies in the SDR basket,” the IMF said.
Although the yuan’s value has fallen recently, since 2016 it has risen about 2 percent against the dollar and is up about 6 percent against its major trading partners.
In a statement Sunday, the People’s Bank of China said China will continue to reform and open up its financial market.
The updated weights will go into effect on August 1st.
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