October 26, 2016
Phone: +1 202 623-7100Email: MEDIA@IMF.org
The Executive Board of the International Monetary Fund (IMF) approved on October 26, 2016 technical modifications to the methods for collecting the exchange rates used in the daily valuation of the SDR [see Board paper]. The Board decision was taken on a lapse-of-time basis. [1]
Since the procedures for capturing the market exchange rates used in the daily valuation of the SDR were last modified in 2000, more robust technologies and methodologies have been developed to capture exchange rates. The newly approved methods for collecting exchange rates will reflect these improvements and will be effective November 1, 2016.
Background
The value of the SDR in terms of the U.S. dollar is determined daily by summing the values in U.S. dollars, based on market exchange rates, of a basket of major currencies: The Chinese renminbi, euro, Japanese yen, pound sterling and the U.S. dollar (see SDR Valuation). The exchange rates used for the daily valuation of the SDR are normally provided to the IMF by the Bank of England, with the Federal Reserve Bank of New York and the European Central Bank serving as the backup providers. These three institutions will continue to act as the providers of the exchange rates to the Fund in the future.
[1] The Executive Board takes decision under its lapse-of-time procedure when the Board agrees that a proposal can be taken without convening formal discussions.
