Seven things you need to know about yuan's inclusion in SDR basket

How does the IMF determine currency weights?

A Chinese employee counts yuan banknotes at a bank in Huaibei city, East Chinas Anhui province, Dec 1, 2011. [Photo/IC]

According to the IMF's new formula for determining currency weights in the SDR basket adopted in 2010, it assigns equal shares to the currency issuer's exports and a composite financial indicator. The financial indicator comprises, in equal shares, official reserves denominated in the member's (or monetary union's) currency that are held by other monetary authorities that are not issuers of the relevant currency, foreign exchange turnover in the currency, and the sum of outstanding international bank liabilities and international debt securities denominated in the currency.

The information is excerpted from the official website of the IMF.