When the decision is effective October 1, it will be the first time in the history of the IMF that the number of currencies in the basket will be increased. We started with 16 currencies in 1974, we went down to 5 currencies in 1981, and with the advent of the euro, we went down to 4 currencies in 1999; and these are the 4 currencies in the basket.
This has come after a series of measures, broad measures that the Chinese authorities have taken to facilitate RMB operations by the Fund and its membership. This included, as you know, last year the utilization of assets to the onshore fixed income and foreign exchange market, for Fund Members and agents acting on their behalf
So with this as background, the inclusion of the RMB in the basket as a freely usable currency is an important milestone for the international monetary system. The inclusion of the RMB will include in its attractiveness for the consolidation and internationalization of the currency, together with the responsibilities that come with it.
In terms of next steps, let me just walk you through what will happen between now and October 1st. So, on the September 30th the IMF will publish the new currency amounts that will drive for the SDR basket going forward, on October 1st, and this will be the currency amounts including the renminbi.
These currency amounts will reflect the rates that have already been agreed by the IMF Executive Board, and they are calculated based on the average exchange rates that apply over the three months through September 30th. And also they are calculated so that there is continuity in the SDR basket so there will be no change in the value of the SDR, and is holding from this transition from the old to the new basket.
What will change over time is the actual weights in the basket. As exchange rates move amongst the major currencies the effective weights will fluctuate, but the currency amounts, the amount of renminbi, the amount of U.S. dollars, euro, yen, and sterling are fixed and they are the amounts that we will calculate on September 30th
September 29, 2016 — 12:02 PM CDT --
"A number of funds that clear derivatives trades with Deutsche Bank AG have withdrawn some excess cash and positions held at the lender, a sign of counterparties’ mounting concerns about doing business with Europe’s largest investment bank."
What must be understood here is that Deutsche Bank is the main clearing house for trades in Europe.
UKfan... After so many years of be deflated currency... Now it will be and have to trade at the same or about numbers of the other 4 currencies around the world as well. What's now backing their currency? Yep... Just watch and see... I'm looking for what may be coming over the weekend and next week! Lots of changes for OUR betterment IMO!