The International Monetary Fund may reconfigure how its reserve currency basket is weighted, resulting in the Chinese yuan likely debuting with a smaller share, Reuters reported, citing two unnamed sources. Under the potential revisions, export volumes would be less important and financial flows would be emphasized, granting the yuan a lower share than the dollar, euro, pound and yen. IMF staff said in July there were “significant shortcomings” with the current methodology – which dates to 1978 – including that it did not take into account a subsequent large increase in financial flows. The IMF will decide on the composition of the basket on November 30.
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