UPSC Prelims 2016 Question:

Recently, which one of the following currencies has been proposed to be added to the basket of IMF’s SDR?

Explanation: Special Drawing Rights (SDR) is a kind of reserve of foreign exchange assets comprising leading currencies globally. It was created by the International Monetary Fund in 1969.

• SDR is often regarded as a 'basket of national currencies'. The composition of this basket of currencies is reviewed every five years wherein the weightage of currencies sometimes get altered.
  
  
• The Chinese Yuan (Renminbi) was proposed to be added to the basket of IMF’s SDR with effect from October 1, 2016.
  
  
• Currently, the basket comprises five major currencies of the world - US dollar, Euro, British Pound,  Yen (Japan) and Renminbi (China) with specific weightage.
  
  

Therefore, option (4) is the correct answer.

Relevance: In 2015, the International Monetary Fund (IMF) decided to include Yuan (Renminbi) in the SDR basket with effect from October 1, 2016. 

Subject: Economics | Economic Organisations and Conventions

Tags: Factual