Recently, which one of the following currencies has been proposed to be added to the basket of IMF’s SDR?

1. A. Rouble
2. B. Rand
3. C. Indian Rupee
4. D. Renminbi

Answer: D

Explanation

The Executive Board of the International Monetary Fund decided to include the Chinese currency, the renminbi (yuan), into its basket of currencies that make up the IMF’s Special Drawing Right (SDR). The decision was taken during the IMF’s five-yearly review of the basket of currencies. SDRs are artificial currency created to augment international liquidity. It is neither a currency nor a claim on IMF rather it supplements the existing reserves of member countries of IMF. To be included as SDR a currency must be freely usable, widely used and widely traded. U.S. dollar, the euro, British pound and the Japanese yen form the SDR basket. IMF has decided to include Yuan in the SDR basket with effect from October 1, 2016. The respective weights of the U.S. dollar, euro, Chinese renminbi, Japanese yen, and pound sterling are 41.73 percent, 30.93 percent, 10.92 percent, 8.33 percent.