Recently, which one of the following currencies has been proposed to be added to the basket of IMF’s

Question

Recently, which one of the following currencies has been proposed to be added to the basket of IMF’s SDR?

Accepted Answer

The Executive Board of the International Monetary Fund decided to include the Chinese currency, the renminbi (yuan), into its basket of currencies that make up the IMF’s Special Drawing Right (SDR). The decision was taken during the IMF’s five-yearly review of the basket of currencies.SDRs are artificial currency created to augment international liquidity. It is neither a currency nor a claim on IMF; rather, it supplements the existing reserves of member countries of IMF. To be included as SDR, a currency must be freely usable, widely used, and widely traded.The currencies that form the SDR basket are:U.S. dollareuroBritish poundJapanese yenIMF has decided to include Yuan in the SDR basket with effect from October 1, 2016. The respective weights of the U.S. dollar, euro, Chinese renminbi, Japanese yen, and pound sterling are:U.S. dollar: 41.73 percenteuro: 30.93 percentChinese renminbi: 10.92 percentJapanese yen: 8.33 percent