The International Monetary Fund is discussing the criteria for adding currencies to its Special Drawing Rights valuation basket made up of the dollar, euro, yen and pound, its number-three official said.
“We are starting to discuss how to assess SDRs, the composition of SDRs and the criteria to add a currency to SDRs if we decided to do so,” Naoyuki Shinohara, deputy managing director at the IMF, told a news conference in Tokyo today. “There is no target date and there’s no premise that we are going to add more currencies.”
Russian President Dmitry Medvedev last month said the currencies of Brazil, Russia, India and China should be included in SDR valuation basket. U.S. President Barack Obama’s administration said in January it supports “over time” putting the yuan into the basket.
The IMF in November said the yuan doesn’t yet meet the “freely usable” criteria required for the basket. The Fund also signaled it will begin examining the indicators used to select currencies.
Shinohara said leaders of the Group of 20 countries may discuss the “role of SDRs” as part of discussions later in the year as part of planned discussions on the international monetary system. He said the IMF is flexible about the composition of SDRs.
The IMF in November cut the U.S. dollar’s weighting to 41.9 percent compared with 44 percent after a 2005 review while the yen’s fell to 9.4 percent from 11 percent. The euro’s share rose to 37.4 percent from 34 percent.