The US dollar and Chinese yuan have been represented to a greater extent since the weekend in a basket of currencies under which the International Monetary Fund determines the value of so-called special drawing rights. The dollar thus strengthened its position as the world’s most important reserve currency.
The weight of both the dollar and the yuan increased
The dollar’s weighting in terms of special drawing rights (SDR) has increased from 41.73 to 43.38 percent since mid-May. The US currency has consolidated its position in a basket of currencies recognised as reserve by the International Monetary Fund. But the IMF also increased the weighting of China’s yuan, from 10.92 per cent to 12.28 per cent.
First increase since 2016
The IMF has stepped up the importance of both currencies on the basis of the development of international financial transactions between 2017 and 2021. It is the first weighting increase in the yuan since 2016, when China‘s currency was adopted among a basket of currencies from which the value of special drawing rights is derived.
Conversely, the weighting has occurred in the case of the euro (from 30.93 to 29.31 percent), the Japanese yen (from 8.33 to 7.59 percent) and the British pound (from 8.09 to 7.44 percent). “Management has concluded that neither covid nor advances in the fintech field have resulted in any significant changes in the representation of individual currencies within the SDR,” the International Monetary Fund said.
