The euro’s worst year in a decade is looking even grimmer after the Chinese yuan’s inclusion in the International Monetary Fund’s basket of reserve currencies.
The 19-nation currency’s weighting in the IMF’s Special Drawing Rights basket will drop to 30.93 percent, from 37.4 percent, the organization said Monday. The yuan will join the dollar, euro, pound and yen in the SDR allocation from Oct. 1, 2016, at a 10.92 percent weighting.
The euro has tumbled 13 percent against the dollar this year, the most in a decade, and central banks have reduced the proportion of the currency in their reserves to the lowest since 2002. European Central Bank President Mario Draghi signaled on Oct. 22 that policy makers are open to boosting stimulus, after embarking on a 1.1 trillion-euro ($1.2 trillion) asset-purchase program in March.