© Reuters. FILE PHOTO: Chinese yuan and U.S. dollar banknotes are seen in this illustration taken on February 10, 2020.REUTERS/Dado Ruvic/Illustration/File Photo
BEIJING (Reuters) – The International Monetary Fund said on Saturday it had increased the weight of the U.S. dollar as it reviewed the currencies that make up the valuation of its international reserve asset, the Special Drawing Rights (SDR).
This is the first review since the yuan was added to the basket of currencies in 2016, a milestone in Beijing’s efforts to internationalise the yuan.
The IMF raised the dollar weight to 43.38% from 41.73% and the renminbi weight from 10.92% to 12.28%. The weight of the euro fell from 30.93% to 29.31%, the weight of the yen fell from 8.33% to 7.59%, and the weight of the pound fell from 8.09% to 7.44%.
The IMF said in a statement that its executive committee has determined the weights based on trade and financial market developments from 2017 to 2021.
“The directors agreed that neither the COVID-19 pandemic nor advances in fintech have had any significant impact on the relative roles of currencies in the SDR basket to date,” the IMF said.
Despite the recent depreciation of the renminbi, since 2016, the renminbi has appreciated about 2% against the dollar and about 6% against its major trading partners.
The People’s Bank of China said in a statement on Sunday that China will continue to advance reform and opening up of its financial markets.
The updated weights will take effect on August 1.