China’s yuan may enter the International Monetary Fund’s benchmark currency basket at a lower weighting than previously estimated as the IMF considers rejigging the basket to better reflect financial
China’s yuan may enter the International Monetary Fund’s benchmark currency basket at a lower weighting than previously estimated as the IMF considers rejigging the basket to better reflect financial flows, people briefed on the Fund’s discussions said.
IMF policymakers are expected to add the Chinese currency to the Special Drawing Rights basket later this month, after a campaign by Beijing for the yuan, or renminbi, to have equal billing with the dollar, euro, pound and yen.
Adding the yuan to the SDR basket would mark the biggest change since 1980, when the number of currencies in the basket was cut from 16.
Two people familiar with IMF deliberations said policymakers were considering changing the way the weights of currencies in the basket are calculated to make export volumes less important and financial flows more important.
China, the world’s largest exporter, lags other countries in financial transactions and such a change would give China’s yuan a lower share in the basket than under the current formula. The yuan’s inclusion is largely seen as a recognition of China’s political and economic heft, but would likely not have a major impact on financial markets.
