Understanding SDR Currency Weightage

Special Drawing Rights (SDRs) are an international reserve asset created by the International Monetary Fund (IMF) to supplement its member countries' official reserves. The value of the SDR is determined by a weighted basket of major international currencies. The currencies included in this basket and their respective weightages are reviewed periodically by the IMF's Executive Board.

Currencies in the SDR Basket

The SDR basket currently includes five major currencies:

• US Dollar (USD)
• Euro (EUR)
• Chinese Yuan (Renminbi) (CNY)
• Japanese Yen (JPY)
• British Pound (GBP)

Determining SDR Value Weightages

The weightage assigned to each currency reflects its importance in international trade and financial systems. The weightings are updated every five years (or earlier if warranted) to ensure they reflect the currencies' relative prominence in the global economy.

Currency Weightages in the SDR Basket (Latest Review)

Based on the most recent review (effective August 1, 2022), the weightages are as follows:

As the table shows, the US Dollar has the largest weightage in the SDR basket. Following the US Dollar, the currency with the second-largest weightage is the Euro.

Conclusion

Therefore, after the US dollar, the currency that has the largest weightage in determining the value of SDR is the Euro.

Revision Table: SDR Currency Details

Additional Information on SDRs

The Special Drawing Right (SDR) is an interest-bearing international reserve asset created by the IMF in 1969. Its value is based on a basket of five major international currencies. SDRs are allocated by the IMF to its member countries in proportion to their quotas. They can be used by countries to obtain foreign exchange, make payments to the IMF, and potentially to other SDR holders. The SDR is not a currency itself, nor is it a claim on the IMF. Rather, it is a potential claim by SDR holders on the freely usable currencies of IMF members.