IMF Determines New Amounts for SDR Valuation
The International Monetary Fund (IMF) announced the new amounts for the five currencies that will determine the value of the special drawing right (SDR) during the new valuation period that runs from August 1, 2022 until July 31, 2027.
It said this completes the final step in implementing the results of the latest review of the method of valuation of the SDR. The Executive Board has decided that effective August 1, 2022, the value of the SDR will be the sum of the values of the following amounts of each currency which include the U.S. dollar, Euro, Chinese Yuan, Japanese yen and Pound sterling.
The Board’s decision on the amount of each currency in the SDR valuation basket is the final step in implementing the results of the latest review of the method of valuation of the SDR, which concluded on May 11, 2022. READ: IMF Approves $650 Billion SDR Allocation for Members Countries
At that review, the IMF determined that the composition of the SDR basket and the weights assigned to each currency in the basket will be 43.38 percent for the U.S. 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.
The SDR interest rate that will be determined on August 5 and applied for the week of August 8, 2022 will 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. # IMF Determines New Amounts for SDR Valuation
