The new SDR was launched in China on October 1st, says the Corbett Report. Bonds were sold in China of the new SDR which is a basket of world currencies mixed together, and sold as a single product. It’s the beginnings of a new world currency, yet it happened in near total obscurity, unnoticed by the world’s media which is, instead, feeding our minds with the usual trivia. Here are the currencies and their relative strengths in the mix.
IMF Launches New SDR Basket Including Chinese Renminbi, Determines New Currency Amounts
If the Euro disintegrates, no doubt its share will be replaced with a relaunched Deutschmark. The Dollar goes from being 100% of the world’s reserve currency to being just 42% of the mix.
As approved by the Executive Board of the IMF on November 30, 2015, effective October 1, 2016, the RMB is determined to be a freely usable currency and will be included in the SDR basket as a fifth currency, along with the U.S. dollar, the euro, Japanese yen, and the British pound ( see Press Release No. 15/543). The Board also decided at that time that the weights of each currency would be 41.73 percent for the U.S. dollar, 30.93 percent for the Euro, 10.92 percent for the Chinese yuan, 8.33 percent for the Japanese yen, and 8.09 percent for the Pound sterling.
Europe has been allocated near parity with the US – 39% (31+8) to the US 42%. Sterling at 8% seems highly valued relative to the Euro’s 31% – giving Britain 25% the size of the whole of the Euro area, and 20% of the US.