2022-05-15-IMF-Review_of_the_Method_of_Valuation_of_the_SDR_62页_2mb

The IMF Executive Board completed the quinquennial review of the SDR currency valuation method on May 11, 2022. Key decisions include maintaining the current list of SDR currencies (U.S. dollar, euro, renminbi, Japanese yen, and pound sterling), updating their weights based on their role in international trade and finance, and extending the current SDR valuation basket until July 31, 2022.

The updated weights, effective from August 1, 2022, are:

• U.S. dollar: 43.38%
• Euro: 29.31%
• Renminbi: 12.28%
• Japanese yen: 7.59%
• Pound sterling: 7.44%

Compared to the previous weights, the renminbi and U.S. dollar saw slight weight increases, while the other currencies experienced decreases. The renminbi's increased share reflects its growing importance in international trade and finance, particularly following its inclusion in the SDR basket in 2016.

The Executive Board agreed to maintain the methodology for handling data gaps, ensuring continuity in the valuation method. The next SDR valuation review is scheduled for mid-2027.

Operationally, surveys of SDR users found limited challenges in the renminbi market, with most users reporting difficulty primarily with transaction costs and market liquidity in the onshore and offshore renminbi markets. Directors noted progress in China's financial market reforms but emphasized the need for further opening and transparency.

The new weights and currency amounts will enter into force on August 1, 2022, with illustrative projections released in early 2022 to facilitate market adjustments.