Tag Archives: sdr basket of currencies

Last December the IMF announced that the Chinese yuan would be included in the basket of currencies used to determine the value of a new global reserve currency called the Special Drawing Right (SDR), or world money. Now, less than four weeks following the G20 Summit, the yuan will officially join the SDR making up over 10% of the SDR. With China onboard, the SDR is poised to become the de facto global reserve currency.

American balance of trade deficits will start to hurt and haunt the U.S. as the world migrates to a series of arrangements for trade beyond the USD (although the USD will continue to function as the lead foreign exchange/reserve and trade currency for sometime yet) and the introduction of an IMF-SDR basket of currencies.