IMF against the Yuan into a basket of 15 official response: why should we support?
Eastern time on November 30, the International Monetary Fund announced Christine Lagarde, the renminbi into "special drawing right" basket.
Eastern time on November 30, IMF special drawing rights of the IMF Executive Board completed its consideration, agreed that in the SDR basket. So soon into the basket of the Renminbi, the SDR itself and IMF operate, what will change? For the Chinese Yuan and China, what would change? Yuan added to the global monetary system and affect overall financial system?
IMF official by text to give authoritative answers, IMF Managing Director Christine Lagarde also responded to the news conference.
here are the International Monetary Fund (IMF) official on the SDR 15 authorities question-and-answer:
question 1. What is an SDR?
special drawing rights is to create a Fund in 1969, international reserve assets to replenish official reserves of member countries. SDR value according to the four major currencies (US dollar, euro, Yen and Sterling) of a currency basket to determine. October 1, 2016 and a basket of currencies after the entry into force, would expand the basket, the Chinese Yuan will be added as the fifth currency basket.
Fund according to each Member's share of the Fund, special drawing rights allocation to the Member States. So far, allocated a total of 204.1 billion special drawing rights last distribution in 2009, the allocations to 182.6 billion special drawing rights.
SDR is not a currency, or claims against the Fund, but the IMF member countries are free to use the currency of potential claims. Holder of special drawing rights can be done in two ways, with its special drawing rights in Exchange for these currencies: one is through voluntary exchange arrangements between the Member States; the second is the strong Fund specified external conditions from weak external position by Member States Member States to purchase special drawing rights.
in addition as a supplementary reserve assets, special drawing rights fund organizations and other international organizations unit. SDR is also used to fund financing arrangements with Member States.
question 2. SDR review typically covers what?
Board normally every five years to review the composition of the SDR basket in order to enhance the attractiveness of the SDR as a reserve asset. Review covers key elements of SDR value method, seek to ensure that the value of special drawing rights reflect the currency in global trade and the relative importance of the financial system. These elements include: criteria for selecting SDR basket of currencies, basket of currencies the number of, and the method of determining the monetary weight. Formed a special drawing rights basket of financial instruments interest rate is usually within the scope of the review.
ends in November 2015 review, the Board decided, as from October 1, 2016, China's Renminbi will be found to be freely usable currency, and as the dollar, euro, Yen and Sterling fifth than the currencies in the SDR basket. In addition, the revised weighting formula to solve their long-standing shortcomings.