- The IMF is lifting its weighting for the US dollar and Chinese yuan in its Special Drawing Rights.
- The dollar's weighting went up to 43.38% from 41.7%, and the yuan's climbed to 12.28% from 10.92%.
- The euro's fell to 29.31% from 30.93%, the yen's fell to 7.59% from 8.33%, and the British pound's dropped to 7.44% from 8.09%.
The International Monetary Fund is raising weightings for the dollar and yuan in its basket of special international reserves, signaling more influence for China's currency in global finance.
In its regular review of so-called Special Drawing Rights, the dollar's weighting rose to 43.38% from 41.7%, and the yuan's climbed to 12.28% from 10.92%.
Conversely, the euro's weighting fell to 29.31% from 30.93%, the yen's fell to 7.59% from 8.33%, and the British pound's dropped to 7.44% from 8.09%.
The IMF said over the weekend that the updated weightings were determined by trade and financial market developments from 2017 to 2021.
China's yuan first joined the SDR basket of currencies in 2016, cementing the country's efforts to legitimize its currency internationally.
SDRs serve as international reserve assets that supplement the existing currency reserves of IMF member countries. SDR is not a currency, but rather serves as the "unit of account" for the IMF and other international bodies, and can be exchanged for the included currencies.
The SDR is reviewed and updated every five years. To be considered in the SDR basket, a currency must meet criteria for exports and free use. The export criterion is met if the issuing country is an IMF member and the currency ranks among the top five assets globally. The other criterion is met if the currency is broadly used for payments and traded in principal markets.