BEIJING: The International Monetary Fund announced on Saturday that it has increased the weighting of the dollar and the Chinese yuan in its examination of the 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, joined the basket of currencies in 2016 in what marked a milestone in Beijing’s efforts to internationalize its currency.
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%. The weighting of the euro fell to 29.31% from 30.93%, that of the yen fell to 7.59% from 8.33% and the pound fell to 7.44% from 8.09% .
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.