QUESTION

Easy

Economy

Prelims 2016

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

Select an option to attempt

Explanation

The SDR is an international reserve asset created by the International Monetary Fund (IMF) and not a single currency. Its value is based on a basket of five major world currencies

US Dollar (USD)
Euro (EUR)
Japanese Yen (JPY)
British Pound Sterling (GBP)
Chinese Renminbi (RMB) (added in 2016)

The IMF reviews the composition of the SDR basket every five years to ensure it reflects the relative importance of currencies in the global trading and financial system. The inclusion of the RMB in 2016 signified the growing importance of the Chinese economy in the world.

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