I had the privilege of being on CNBC to discuss the significance of China being included in the IMF’s Special Drawing Right.

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The decision was announced shortly after the interview on CNBC.  It was largely a foregone conclusion that China would join. Besides the confirmation, the new news was in the weighting. China’s yuan got an almost 11% share of the new SDR that will be launched 1 October 2016. 

The room for the yuan comes comes mostly at the expense of Europe (euro and sterling). The dollar’s weighting is little changed at 41.73% vs 41.90% previously. Among the five currencies that will make up the SDR, sterling has the least weight 8.09% (down from 11.3%). The yen, which had the lowest weighting (of 9.4%), is now in fourth place with 8.33%. The euro took the biggest hit.  Its share of the SDR was cut to 30.93% (from 37.4%).