Press Release No. 95/49

Press Release: IMF Sets List of Currencies and New Weights in SDR Valuation Basket

September 26, 1995

The International Monetary Fund (IMF) has determined the list of the currencies and their new weights in the basket used to set the daily value of the SDR. With effect from January 1, 1996, the list of currencies in the SDR valuation basket will remain the same and the weight of each to be used to calculate the amount of each of these currencies in the basket will be as follows:

The revision of the amount of each currency is undertaken in accordance with the IMF decision of September 17, 1980 (Press Release No. 80/66) stipulating that the valuation basket of the SDR be revised every five years with effect from January 1, 1986, unless the IMF's Executive Board decides otherwise. The amounts of each of the five currencies to be included in the new SDR valuation basket will be calculated on December 29, 1995 in accordance with the new weights indicated above. The calculation will be made on the basis of the average exchange rates for these currencies over the three months ending on that date in such a manner as to ensure that the value of the SDR in terms of these currencies will be the same on December 29, 1995 under both the revised valuation and present valuation baskets.

The SDR basket includes the currencies of the five member countries of the IMF with the largest exports of goods and services during the five-year period preceding the revision, which in the present case is the period 1990-94. The weights of the currencies in the basket reflect the relative importance of these currencies in international trade and finance during this period, and are based on the value of the exports of goods and services of the members issuing these currencies and the amount of their currencies officially held by members of the IMF.

The previous weights based on 1985-89 data used to determine the amount of each currency in the current SDR basket, which was revised in 1991, were 40 percent for the U.S. dollar, 21 percent for the Deutsche mark, 17 percent for the Japanese yen, and 11 percent each for the French franc and the Pound sterling.

As a result of the unification of the SDR valuation and interest rate baskets in 1981, the currency amounts in the SDR interest rate basket are identical with those in the SDR valuation basket. The SDR interest rate is determined weekly as a weighted average of interest rates on currencies, with weights reflecting the values of the currency amounts in the basket.

The Executive Board also reviewed the financial instruments included in the SDR interest rate basket and decided that these instruments will remain unchanged. The instruments are the three-month Treasury bill for the United States, the United Kingdom, and France, the three-month interbank deposit rate for Germany, and the three-month certificate of deposit rate for Japan. These instruments continue to meet the criteria of being broadly representative of government securities in which central banks would hold official reserves, and of reflecting the underlying credit conditions in the corresponding money markets for the five currencies included in the SDR basket.