IMF: Review of Special Drawing Rights (SDR)

May 20, 2022

The International Monetary Fund (IMF) increased the weighting of the US dollar and Chinese yuan (Renminbi) in the Special Drawing Rights (SDR) basket of currencies. The updated weightings will be effective from August 1^st.

What are the current weights assigned to each currency in the SDR basket?

S. dollar’s weighting was increased to 43.38% from 41.73%.
Chinese yuan’s weighting was increased to 12.28% from 10.92%.
Euro’s weighting was reduced to 29.31% from 30.93%.
Japanese yen’s weighting was reduced to 7.59% from 8.33%.
British pound’s weighting was reduced to 7.44% from 8.09%.

Which years were considered for the review?

The review is based on trade and financial market developments from 2017 to 2021. This is the first review since the Chinese yuan joined the basket of currencies in 2016. As of now, the COVID-19 pandemic or advancements in Financial technologies does not have any major impact on the relative role of currencies in the Special Drawing Rights (SDR) basket.

What are Special Drawing Rights (SDRs)?

SDRs are international foreign exchange reserve assets, created in 1969 by the International Monetary Fund (IMF) to supplement the official reserves of IMF’s member countries. Its value is based on a basket of five currencies: the U.S. dollar, the euro, the Chinese yuan, the Japanese yen, and the British pound sterling. SDRs are not a currency; rather they represent a claim to currency held by member countries of IMF. Thus, SDRs can be exchanged for the currencies of IMF’s member countries.

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