Late Monday night the IMF announced the results of its five-yearly review of the composition and weightings of Special Drawing Rights. The surprise – or not – is that very little will change from January 1 2011: the IMF’s unit of account will be composed of 41.9% USD (down from the current 44%), 37.4% EUR (up from 34%), 11.3% GBP (much the same, currently 11%) and 9.4% JPY (currently 11%).
There had been calls for the inclusion of gold, CNY, RUB, AUD or CAD in SDRs over the past year.
The omission of the yuan was no great surprise. The Chinese authorities have accelerated the currency’s use lately and the CNH (yuan cleared through Hong Kong) market makes the yuan convertible after a fashion, but that is too recent to merit the yuan’s inclusion this time around.
Indeed, it seems that an expansion of SDR composition was never on the cards anyway. Bloomberg BusinessWeekreports an IMF spokesman as saying: “There was never any plan to revise the currencies at the latest five-year review.” The IMF always intended to stick to the procedure it has adhered to for the past decade: “the currencies included in the SDR are the four currencies issued by Fund members...