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In December 2015, to reduce the influence of the dollar in measuring the value of the yuan, Chinese monetary and foreign exchange authority introduced the Renminbi index or CFETS RMB index, which is the value of the yuan against a basket of 13 currencies. The move was aimed at reducing the dependence on the dollar in the foreign exchange market and international trade and also to broaden the appeal of the yuan as a major currency.
The Chinese authority, effective from 1st January has introduced 11 new currencies in the basket, which means that the value of the yuan would be determined by moves in 24 different currencies. The table below details out the new RMB index -
|
New Renminbi index Weightage |
|
|
Currency |
Weightage (%) |
|
US Dollar |
22.40 |
|
Euro |
16.34 |
|
Japanese Yen |
11.53 |
|
Korean Won |
10.77 |
|
Australian Dollar |
4.40 |
|
Hong Kong Dollar |
4.28 |
|
Malaysian Ringgit |
3.75 |
|
Singapore Dollar |
3.21 |
|
British Pound |
3.17 |
|
Thai Baht |
2.91 |
|
Russian Ruble |
2.63 |
|
Canadain Dollar |
2.15 |
|
Saudi Arabian Riyal |
1.99 |
|
Arab Emirates Dirham |
1.87 |
|
South African Rand |
1.78 |
|
Swiss Franc |
1.71 |
|
Mexican Peso |
1.69 |
|
Turkish Lira |
0.83 |
|
Polish Zloty |
0.66 |
|
Swedish Krona |
0.52 |
|
New Zealand Dollar |
0.44 |
|
Danish Krone |
0.40 |
|
Hungarian Forint |
0.31 |
|
Norwegian Krone |
0.27 |
All the previous members of the basket saw their weight cut down over these new additions, except for the Swiss franc, whose share rose from 1.51 percent to 1.71 percent.
