First time the Yuan has been included..

The IMF has announced the weightings for currencies in it's SDR basket of currencies. This is the first time the Yuan has been included in the basket.

Per the IMF website:

"The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries' official reserves. As of March 2016, 204.1 billion SDRs (equivalent to about $285 billion) had been created and allocated to members. SDRs can be exchanged for freely usable currencies. The value of the SDR is currently based on a basket of four major currencies: the U.S. dollar, euro, the Japanese yen, and pound sterling. The basket will be expanded to include the Chinese renminbi (RMB) as the fifth currency, effective October 1, 2016."

They go on:

"The SDR is neither a currency, nor a claim on the IMF. Rather, it is a potential claim on the freely usable currencies of IMF members. Holders of SDRs can obtain these currencies in exchange for their SDRs in two ways: first, through the arrangement of voluntary exchanges between members; and second, by the IMF designating members with strong external positions to purchase SDRs from members with weak external positions. In addition to its role as a supplementary reserve asset, the SDR serves as the unit of account of the IMF and some other international organizations."

The new weights of an SDR is now:

  • USD: 41.73%
  • EUR: 30.93%
  • Yuan: 10.92%
  • JPY: 8.33%
  • GBP: 8.09%

The old weights in the basket were:

  • USd 41.9%
  • EUR: 37.4%
  • JPY 9.4%
  • GBP 11.3%

For more information on the SDR, please consult the IMF website HERE.