The International Monetary Fund (IMF) allocates
SDRs to its member countries to supplement their official reserves.
国际货币基金组织（IMF）向其成员国分配特别提款权（
SDRs），以补充其官方储备。
SDRs can be used as a means of payment among governments and international institutions.
特别提款权可用作政府和国际机构之间的支付手段。
China has called for increasing the role of
SDRs in the global financial system.
中国呼吁提升特别提款权在全球金融体系中的作用。
The value of an
SDR is based on a basket of five major currencies: the U.S. dollar, euro, Chinese yuan, Japanese yen, and British pound.
特别提款权的价值基于五种主要货币的篮子：美元、欧元、人民币、日元和英镑。
Holding
SDRs helps countries mitigate the impact of currency fluctuations on their reserves.
持有特别提款权有助于各国缓解货币波动对其储备的影响。
In times of crisis, countries can exchange
SDRs for freely usable currencies to address balance-of-payments needs.
在危机时期，国家可以将特别提款权兑换为可自由使用的货币，以解决国际收支需求。
The IMF periodically reviews and adjusts the composition of the
SDR basket to reflect changes in the global economy.
国际货币基金组织定期审查并调整特别提款权篮子的组成，以反映全球经济的变化。
SDRs are not a liability of the issuing country but represent a potential claim on the freely usable currencies of IMF members.
特别提款权不是发行国的负债，而是代表了对国际货币基金组织成员国可自由使用货币的潜在债权。
An increase in
SDR allocation aims to enhance global liquidity and support the economic recovery of member states.
增加特别提款权的分配旨在增强全球流动性，并支持成员国的经济复苏。
While
SDRs are not a substitute for traditional currency reserves, they provide an additional layer of financial safety for countries.
尽管特别提款权不能替代传统的货币储备，但它们为国家提供了一层额外的金融安全网。
The SDR is a supplementary international reserve asset.
In 2016, the International Monetary Fund included the yuan in its SDR basket as a fifth currency, enhancing China's role as a global economic driver.
In the latest valuation review of the Special Drawing Right－an international reserve asset also known as the SDR, the IMF raised the weight of the renminbi in the basket of currencies that make up the SDR by 1.36 percentage points to 12.28 percent, the People's Bank of China, the nation's central bank, said on Sunday.
The SDR valuation review, completed on Wednesday, marked the first review since the renminbi was included in the SDR basket in 2016, with a share of 10.92 percent, the central bank said.
An IMF statement on Saturday said the updated SDR weights were based on developments in trade and financial markets from 2017 to 2021, with IMF executive directors acknowledging the progress made on financial market reforms in China.
Apart from raising the SDR share of the renminbi, the IMF increased the dollar's weighting to 43.38 percent, up by 1.65 percentage points from the last review in 2015.
- The share of Chinese yuan in the International Monetary Fund's (IMF) Special Drawing Rights (SDR) basket has risen from 10.92 percent to 12.28 percent, China's central bank said on its official website Sunday.
The SDR is an international reserve asset supplementing members' official reserves, which can be exchanged among governments for freely usable currencies in times of need.
In 2016, the IMF included the yuan in its SDR basket as a fifth currency, along with the U. S. dollar, the euro, the Japanese yen and the British pound.
At present, Chinese yuan ranks third in terms of the weight in the SDR basket, after the US dollar and the euro.
The new SDR basket will come into effect on Aug 1, this year, according to the People's Bank of China.
"The SDR allocation will provide additional liquidity to the global economic system -- supplementing countries' foreign exchange reserves," Georgieva said, adding countries can use the space provided by the SDR allocation to support their economies and step up their fight against the crisis.
The announcement came weeks after the board of governors of the IMF on Aug 2 finally approved the SDR allocation proposal, which was delayed for more than a year.
The SDR allocation proposal gained wide support during the virtual spring meetings of the IMF and the World Bank held in April, as G20 finance ministers and central bank governors, as well as officials from other IMF members, backed the plan.
The SDR, an international reserve asset created by the IMF in 1969 to supplement its member countries' official reserves, can be exchanged among governments for freely usable currencies in times of need.
- The executive board of the International Monetary Fund (IMF) has approved a proposal for a new general Special Drawing Rights (SDR) allocation of $650 billion, the largest allocation in the IMF's history, to help members recover from the COVID-19 pandemic, IMF Managing Director Kristalina Georgieva said on Friday.
"I will now present the new SDR allocation proposal to the IMF's Board of Governors for their consideration and approval.
If approved, we expect the SDR allocation to be completed by the end of August," Georgieva said in a statement.
The SDR allocation will boost the liquidity and reserves of all our member countries, build confidence, and foster the resilience and stability of the global economy," she said.
Noting that an SDR allocation in 2009 had contributed significantly to recovery from the global financial crisis, Georgieva believed that the new SDR allocation will help every IMF member country, particularly vulnerable countries, strengthen their response to the COVID-19 crisis.
Final approval of the SDR allocation by the Board of Governors requires an 85-percent majority of the total voting power of all IMF members.
The SDR can be exchanged among governments for freely usable currencies in times of need.
The Chinese currency, renminbi, formally became the fifth currency in the SDR basket on Oct 1, 2016, joining the US dollar, the euro, the Japanese yen, and the British pound.
Georgieva called for further strengthening global cooperation, such as in the Common Framework for orderly debt resolution, and the possible new SDR allocation of $650 billion from the IMF, as well as in other fiscal and monetary measures.
Their comments marked the completion of one year since the RMB's SDR weight was adjusted, which led to increased global use of the Chinese currency.
Effective Aug 1 of 2022, the IMF had raised the RMB's SDR weight from 10.92 percent to 12.28 percent, recognizing the currency's growing heft in global trade and finance.
"Multiple factors have formed the basis for the renminbi's growing weight in the SDR basket," said Yang Haiping, a researcher at the Institute of Securities and Futures, which is part of the Central University of Finance and Economics.
Yang said the rising attractiveness of RMB-denominated assets also suggests a positive outlook for the currency's position in the SDR basket.
Guan Tao, global chief economist at BOC International, however, said RMB internationalization is likely to be a "winding and wave-like" process, cautioning that there is a possibility that the RMB's weight in the SDR basket might dip.
"We should approach this with a balanced perspective," Guan said, underlining that one of the key reasons behind the RMB's increased weight in the SDR basket was China's rising share in global exports during the COVID-19 pandemic, a trend that may lose some momentum going forward.
The IMF usually reviews the SDR basket every five years, evaluating whether a currency is widely used in payments for international transactions and widely traded in principal exchange markets and whether the currency-issuing economy is one of the top five world exporters.
The next SDR review is scheduled to conclude before the end of July 2027.
Included in the basket in 2016, the RMB currently accounts for the third-largest share in the SDR basket, behind the dollar and the euro but ranking higher than the Japanese yen and the British pound.
"Compared with 2016 when the currency was first included in the SDR basket, the renminbi's share in global foreign exchange reserves has risen by about 1.68 percentage points to 2.76 percent as of the third quarter of 2022, ranking fifth worldwide, according to the IMF's Currency Composition of Official Foreign Exchange Reserves database.
After the weighting increase, the Chinese currency continues to hold the third-largest overall share within the SDR basket, behind the dollar and the euro but ahead of the Japanese yen and the British pound.
Wang Chunying, deputy head of SAFE, said there is significant potential for foreign investors to further raise holdings in renminbi-denominated assets, with the weighting increase of the renminbi in the SDR basket demonstrating the international community's recognition and confidence in China's economy and financial markets.
Foreign entities' holdings of domestic RMB financial assets have increased by 2.4 times compared with 10 years ago, while the share of Chinese yuan in the International Monetary Fund's (IMF) Special Drawing Rights (SDR) basket has risen from 10.92 percent to 12.28 percent.
The IMF said on May 14 that it has lifted the yuan's weighting in the SDR currency basket to 12.28 percent from 10.92 percent, effective from Aug 1, keeping the yuan the third top currency in terms of share in the basket.
It marks the first SDR review since the renminbi formally became the fifth currency in the SDR basket in 2016.
The SDR is an international reserve asset created by the International Monetary Fund to supplement the official reserves of its member countries.
"This will structurally go up significantly… the SDR basket is around 11 percent (for RMB).
Ding Zhijie, director of the Foreign Exchange Research Center, which is part of the State Administration of Foreign Exchange, said he expects further reform measures in SDR allocations in the future.
Other experts China Daily spoke to on Tuesday said they hope more SDR reform measures will take effect after the review.
It was in 2016 that the IMF included the RMB in its Special Drawing Rights or SDR basket for the first time.
An SDR is a potential claim on the freely usable currencies of IMF members to provide a country with liquidity.
Speaking at a G20 virtual meeting of finance ministers and central bank governors under the Italian presidency, Yi Gang, governor of the People's Bank of China, the central bank, highlighted the importance of boosting the SDR allocation and channeling more SDRs to low-income countries to support economic recovery.
She welcomed the growing support for a new SDR allocation and the calls for an additional mechanism to enable wealthier G20 members to support low-income countries through SDRs.
In a letter to the G20 meeting, US Treasury Secretary Janet Yellen signaled her provisional support for a new allocation of SDRs and urged G20 countries to send their own SDR allocations to low-income countries.
According to the IMF, so far SDR 204.2 billion, the equivalent of about $293 billion, has been allocated to members, including SDR 182.6 billion allocated in 2009 following global financial crisis.
The value of the SDR is based on a basket of five currencies: listed in order of their contribution, the US dollar, euro, Chinese yuan, Japanese yen and British pound.
In the first half of 2020, RMB cross-border payments grew 36.7 percent year on year to reach 12.7 trillion yuan ($1.83 trillion), while RMB's share of global currency reserves was more than 2 percent in the first quarter of the year, nearly doubling its share seen in 2016 when RMB was included in the IMF's Special Drawing Rights (SDR) basket of currencies, according to him.
For instance, the renminbi is one of the IMF's SDR basket currencies.
The former IMF executive called the adoption of RMB into the SDR basket "a major achievement for China", because it was the process through which China improved its information, accountability and transparency.
The RMB makes up 10.9 percent of the IMF's (SDR) special drawing right currency basket, behind the dollar and euro.
Analysts believe that the RMB's growing share in the foreign exchange reserves of the world's central banks reflects an uptick in interest in holding RMB assets after the RMB was included in the IMF's Special Drawing Rights (SDR) basket in November 2016.
Schipke noted that the inclusion of the RMB in the IMF's Special Drawing Rights (SDR) basket in 2016 was associated with operational improvements in China's bond market, which has triggered a surge in global investor interest.
Oct 1 marked the second anniversary of the yuan being included in the SDR — a reserve currency built from a basket of important national currencies assigned by the IMF — with a weight of 10.92 percent.
"Ascendancy of Chinese yuan in the Special Drawing Rights (SDR) basket of currencies is an important symbol of its importance and IMF's approval as an official reserve currency.
The International Monetary Fund included the Renminbi in the Special Drawing Rights' (SDR) basket of currencies in 2016.
A year has passed since the Chinese currency renminbi, or the yuan joined the IMF Special Drawing Right (SDR) basket.
Created by the IMF in 1969, the SDR is an international reserve asset to supplement members' official reserves.
At that time, China's currency the renminbi had been included in the Special Drawing Right (SDR) basket of the IMF for more than one month.
The PBOC called the yuan's SDR inclusion "a milestone in the internationalization of the yuan" and "recognition of China's progress in economic development as well as financial reforms and opening up.
"China has strengthened the transparency of its exchange rate policies after joining the SDR, and the yuan is getting more and more attention in the international financial market," said Guan Tongwei, a professor at Guangdong University of Finance.
Over the medium to long term, as the yuan joined the International Monetary Fund's basket of currencies, named the Special Drawing Rights (SDR), the demand for yuan-denominated bonds is expected to grow, and bring hundreds of billions of dollars to the new fund.
Last year, the IMF included the Chinese currency, the renminbi (RMB), into the SDR basket as a fifth currency.
The People's Bank of China (PBOC), China's central bank, could play a role in promoting the wider use of Special Drawing Rights (SDR), said Yi Gang, deputy governor of the PBOC, on Friday.
The use of SDR as a unit of account, financial instruments and official reserves has shown progress since the Chinese currency, the renminbi, joined the SDR basket last year, said Yi at a forum during the International Monetary Fund (IMF) and World Bank Spring Meetings.
According to the deputy governor, China has started reporting foreign reserves and international balance of payment data in SDR; and the World Bank and Standard Chartered have successfully issued SDR bonds in China.
However, Yi pointed out that the infrastructure for the SDR market needs improvement because the market still lacks liquidity, and the costs for hedging and settlements remain high.
In order to promote SDR market liquidity, Yi suggested that market institutions could increase the use of SDR as an accounting unit, which could encourage their participation in the SDR market and inject more liquidity into the market.
Mohamed El-Erian, chief economic advisor for Allianz, at the same forum also suggested that multilateral banks, sovereign wealth funds and multinational companies could be potential players in the SDR market.
In terms of official SDR reserves, Yi said that the IMF has played an important role in SDR allocation, while other central banks of countries that issue the reserve currency could also play a role in facilitating other SDR reserve holders to convert their SDR assets into other reserve currency assets.
The SDR is an international reserve asset created by the IMF in 1969 to supplement its member countries' official reserves.
Last year, the IMF decided to include the RMB in the SDR basket as a fifth currency.
It's the first time for the IMF to include a currency from an emerging market economy in its SDR basket.
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