The International Monetary Fund (IMF) has awarded the Chinese yuan a higher weight in it’s five-yearly review of the special drawing rights (SDR) currency basket. The move is an acknowledgement of China and the yuan’s changing economic status, reports the South China Morning Post.
The Chinese currency’s weight will be raised to 12.28%, an increase of 1.36% from the 2016 assessment, according to an IMF statement on Saturday. The decision will take effect from August 1.
The increase, however, was overshadowed by the 1.65% increase for the US dollar, which now accounts for 41.73% of the currency basket, indicating great challenges ahead to break the US dollar’s dominance in the international financial system.