IMF to add yuan to SDR reserve currency basket

The International Monetary Fund has admitted the yuan to the Special Drawing Rights basket of reserve currencies alongside the dollar, euro, yen and pound, Reuters reported. The yuan will have a 10.92% share, in line with expectations, after a review of the weightings formula for the SDR which also cut the euro’s share by more than 6 percentage points. The yuan’s inclusion in the basket from October 2016 is a largely symbolic move with few immediate implications for financial markets. But it is the first time an additional currency has been added to the SDR basket, which determines which currencies countries can receive as part of IMF loans.