Criteria for Broadening the SDR Currency Basket

September 23, 2011

Preview Citation

Format: Chicago

Criteria for Broadening the SDR Currency Basket, (USA: International Monetary Fund, 0) accessed November 9, 2024

Summary

The paper explores the pros and cons of maintaining the current “freely usable currency” criterion, and clarifies indicators for assessing it. The freely usable concept and its two key elements—currencies should be "widely used" and "widely traded"—are set out in the Articles and serve important operational purposes. A formal requirement for a currency to be freely usable was adopted for SDR valuation only in 2000, although considerations relating to this concept had been taken into account earlier. Indicators for assessing freely usable currencies were first discussed in 1977, and are updated to reflect subsequent developments in financial markets and data availability. The paper suggests as indicators for "wide use" the currency composition of foreign exchange reserves, international debt securities, and international bank liabilities; and for "wide trading" it proposes foreign exchange spot market turnover.

Subject: Basket of currencies, Foreign exchange, International monetary system, Reserves, SDR valuation basket

Publication Details

Pages:

---
Volume:

---
DOI:

---
Issue:

---
Series:

Policy Papers
Stock No:

---
ISBN:

---
ISSN:

---

FACTSHEETS

RESOURCES

TOPICS

Flagship Publications

Other Publications

IMF reports and publications by country

Regional Offices

All News

See Also

For Journalists

Press Center

RESOURCES

FLAGSHIPS

KEY SERIES

IMF NOTES

Policy Papers