WASHINGTON, -- The International Monetary Fund (IMF) has announced the launch of the new Special Drawing Right (SDR) valuation basket, which includes the Chinese renminbi (RMB), and the new currency amounts that will determine the value of the SDR during the new valuation period.
As approved by the Executive Board of the IMF on November 30, 2015, effective October 1, 2016, the RMB is to be a freely usable currency and will be included in the SDR basket as a fifth currency, along with the U.S. dollar, the euro, Japanese yen, and British pound. The Board also announced that the weights of each currency would be 41.73 percent for the U.S. dollar, 30.93 percent for the Euro, 10.92 percent for the Chinese yuan, 8.33 percent for the Japanese yen, and 8.09 percent for the pound sterling.
To mark the launch of the new SDR basket, Christine Lagarde, Managing Director of the IMF, stated, "The expansion of the SDR basket is an important and historic milestone for the SDR, the Fund, China and the international monetary system. It is a significant change for the Fund, because it is the first time since the adoption of the euro that a currency is being added to the basket.
"The Renminbi's inclusion reflects the progress made in reforming China's monetary, foreign exchange, and financial systems, and acknowledges the advances made in liberalizing and improving the infrastructure of its financial markets. The continuation and deepening of these efforts, with appropriate safeguards, will bring about a more robust international monetary and financial system, which in turn will support the growth and stability of China and the global economy.
"This milestone also reflects the on-going evolution of the global economy. The Fund plays an important role in this evolving process, and the inclusion of the Renminbi in the SDR basket shows, once again, that the Fund stands ready to adapt to change."
Source: Emirates News Agency