China joins the SDR club

China has become the first developing country to have its currency – the renminbi – placed in the International Monetary Fund’s benchmark basket of lending reserves, the IMF’s Special Drawing Rights (SDRs)
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SDRs: Reserve asset created by IMF in 1969 as supplement to member countries’ foreign exchange reserves. Member can exchange SDRs for hard
currency through trading deals with other countries

Value: There are no notes or coins.  U.S. dollar-value is calculated as
sum of currencies based on exchange rates quoted at noon each day on London market

US$ 41.73 Euro 30.93% Renminbi (Chinese yuan) 10.92% Japanese yen 8.33%
British pound 8.09% ¥/$ 2.7%
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SDR basket (from Dec 1, 2015)
Total SDRs: 204.1bn
Value: $280.06bn*
Beijing’s reforms: Tying exchange rate of Renminbi (yuan) at start of daily trading to its previous day’s close – was set by People’s Bank of China – better access for foreigners to Chinese currency markets, expanded trading hours

Aug 2015: 2.7%% devaluation of yuan seen as move towards markets fixing currency’s value
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Source: International Monetary Fund *1SDR = $1.372170, Nov 30, 2015
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