IMF Executive Board Approves Extension of Current SDR Currency Basket Until September 30, 2016
The proposal for the extension was put forward by IMF staff in a paper published on August 4, 2015 (see Review of the Method of Valuation of the SDR – Initial Considerations) and subsequently submitted to the Executive Board for lapse-of-time decision.
The IMF formally reviews the composition and valuation of the SDR basket every five years. The next review is expected to be completed by end 2015, with any decisions affecting the current SDR basket to become effective starting October 2016.
The nine-month extension is intended to facilitate the continued smooth functioning of SDR-related operations and responds to feedback from SDR users on the desirability of avoiding changes in the basket at the end of the calendar year. The extension would also allow users sufficient lead time to adjust in the event that a decision were to be taken to add a new currency to the SDR basket. As noted in recent IMF staff papers (see e.g. IMF Work Progresses on 2015 SDR Basket Review), the approved extension of the current basket does not in any way prejudge the outcome of the Review of the Method of Valuation of the SDR, expected to be discussed formally by the Executive Board later this year.
1 The Executive Board takes decisions under its lapse of time procedure when it is agreed by the Board that a proposal can be considered without convening formal discussions.