IMF approves new currency amounts for special drawing rights

The International Monetary Fund has announced the new amounts for the five currencies that will determine the value of the Special Drawing Right during the new valuation period that runs from August 1, 2022 until July 31, 2027.

The IMF said in a statement on Saturday that its executive board decided that, effective August 1, 2022, the value of the SDR will be the sum of the values of the amounts of each of these currencies: US dollar (0.57813), euro (0.37379), Chinese yuan (1.0993), Japanese yen (13.452) and pound sterling (0.080870)

“Today’s board’s decision on the amount of each currency in the SDR valuation basket is the final step implementing the results of the latest review of the method of valuation of the SDR, concluded on May 11, 2022,” it said.

The Washington-based fund it determined that the composition of the SDR basket and the weights assigned to each currency in the basket would be 43.38 percent for the US dollar, 29.31 percent for the euro, 12.28 percent for the Chinese renminbi, 7.59 percent for the Japanese yen, and 7.44 percent for the pound sterling.

It said the SDR interest rate that would be determined on August 5 and applied for the week of August 8, 2022 would be the first one that reflects the new SDR valuation basket.

“It will be based on the exchange rates and interest rates that will prevail at the time of its determination, and the above currency amounts. The change in the SDR interest rate relative to the previous week will reflect the changes in the shares of currencies in the SDR valuation basket, as well as the changes in the interest rates on each financial instrument in the interest rate basket,” the IMF said.

Leave a Reply

Your email address will not be published. Required fields are marked *