The International Monetary Fund (IMF) announced on September 30, 2016, that the new Special Drawing Right (SDR) basket including the Chinese Renminbi (RMB) would become effective on October 1. Ms. Christine Lagarde, Managing Director of the IMF, issued a statement and said that the inclusion of the RMB in the SDR basket reflects the increased role of the RMB in the international monetary system and will bring about a more robust international monetary and financial system. The People’s Bank of China welcomes the official inclusion of the RMB into the SDR basket and the statement issued by the Managing Director.
The new SDR basket includes the U.S. dollar, the Euro, the Chinese yuan, the Japanese yen and the Pound sterling. The weights of each currency are 41.73 percent for the U.S. dollar, 30.93 percent for the Euro, 10.92 percent for the RMB, 8.33 percent for the Japanese yen and 8.09 percent for the Pound sterling. The respective currency amounts of the five currencies are 0.58252, 0.38671, 1.0174, 11.900 and 0.085946. The IMF calculates the SDR interest rate on a weekly basis and will publish for the first time on October 7 the new SDR interest rate reflecting the representative interest rate for the RMB, i.e. the three-month government bond yield. The specific method of calculating SDR exchange rate is explained in the attached Q&A on SDR.
The inclusion of the RMB into the SDR basket is a milestone of the RMB internationalization and an acknowledgement of the progress in China's economic development, reform and opening-up. It will help increase the representativeness, stability and attractiveness of the SDR and improve the international monetary system. China will take this opportunity to further deepen financial reforms, to expand financial opening-up, and to contribute to global growth, financial stability and better global economic governance.
Attachment:
1.Links to IMF press release and Managing Director’s statement: http://www.imf.org/en/News/Articles/2016/09/30/AM16-PR16440-IMF-Launches-New-SDR-Basket-Including-Chinese-Renminbi
