The Global Geo Economic Map And Even The World History Process Will Surely Take On A New Look.

In today's world and in the foreseeable future, reserve currencies are still popular. This shows that the international monetary mechanism is the result of active design and human modeling, and is the result of international strategic game and national will competition of major powers, especially the natural selection of international market choice and not human will.

On Monday, November 30th, east of America, the haze of Beijing was so heavy that it was so suffocating that the school burst out laughing.

Nevertheless, this is a day that will surely be recorded in the annals of history.

On this day, the Executive Board of the International Monetary Fund (IMF) made a formal decision: China's RMB has become the statutory international reserve currency. Since October 1, 2016, it has become the fifth currency of the International Monetary Fund basket with the US dollar, euro, pound sterling and Japanese yen.

This means that for China's currency, the renminbi will soon become the internationally recognized top currency.

For the existing international mechanism, China has made the most valuable and breathtaking decisive voice in all international organizations that want to join and join.

For the pattern of world power, the eastern civilization of the Chinese representative will return to the center of the world stage, and the global geo economic map and even the world history process will surely take on a new look.

As time goes on, people may only remember October 1, 2016, which coincides with the 67th anniversary anniversary of the founding of the People's Republic of China.

However, historians of later generations will never forget November 30, 2015, because on this day, in the course of China's coming to the world's great power in twenty-first Century, the International Monetary Fund held a coronation ceremony for China in the last threshold of this process, and according to the usual practice, the date of the occurrence of major events is the historical anniversary.

The basket of currencies, that is, SDR basket (Special Drawing Rights basket) or IMF Reserve Basket (International Monetary Fund Reserve basket), is called IMFs Special Drawing Rights (SDR) currency or Rights, and the "International Monetary Fund Special Drawing Rights (currency) basket".

It can be seen that the key to understanding the basket of Renminbi is the special drawing right, namely SDR.

What is SDR? SDR is

A reserve asset and account unit created is not a real currency. It must be pferred to other currencies through the International Monetary Fund and can not be used directly for trade or non trade settlement.

Because it is a supplement to the general drawing right at the beginning of the International Monetary Fund, it is called the special drawing right.

It has 3 uses: first, as the reserve assets of our country, we have to pay the bill when the balance of payments deficit occurs; the two is to repay the loans, interest and payment expenses of the International Monetary Fund; and the three is the financial business among the participating countries, providing and repaying loans, loan guarantees, forward pactions and gifts.

Generally speaking, SDR has 4 characteristics: first, SDR is essentially a supplementary international reserve instrument created by the fund to compensate for the lack of international reserves. The basic role of SDRs is to serve as an international payment instrument and monetary unit between Member States and funds, and it can also be converted into freely available foreign exchange among Member States.

Secondly, as a kind of international reserve assets, SDRs are issued by the fund according to the need of international solvency and are collectively supervised and managed by the member states of the fund.

Moreover, under the account of the SDR, the participating countries (the member countries participating in the SDRs) have the right to withdraw their own reserve assets without any other conditions, and withdrawals do not have to be repaid and interest income can be obtained.

The calculation method of the SDR interest rate is roughly based on the weighted average calculation of the short-term interest rates in the 4 financial markets of the United States, Germany, Japan and Britain, and is adjusted quarterly.

Finally, in order to maintain the special drawing rights as a fairly stable benchmark for international reserve assets and monetary value setting units, the IMF may, at any time, change the valuation methods and principles of SDRs at any time, in accordance with the authorization of the fifteenth articles and second paragraphs of the fund agreement.

Popularly speaking, SDR is a kind of book assets, that is, the right of the IMF to allocate funds to Member States.

Although it can not be treated as a tangible asset, it can be used to pay debts, to be used as a certificate of obligation, to act as an international gift or to convert into any other currency in circulation.

Therefore, it is a financial symbol of international identity and world status.

So how is the SDR allocated?

The SDR was formally established in the 1969 fund annual meeting and linked to gold. That is, the value is determined by the gold content, which stipulates that 35 SDR is equal to 1 ounces of gold.

At that time, 1 ounces of gold = 35 dollars, so special drawing rights and the equivalent value of the United States, also known as "Paper Gold".

The price of SDRs to other currencies is calculated by the ratio of US dollars to other currencies.

In August 15, 1971, the Nixon administration abandoned the US dollar "gold standard" and implemented the free float of gold and US dollar.

This indicates that the foundation of the Bretton Woods system has been lost, and the US has turned to the use of the US dollar as the function of the world currency, and the US dollar can be issued without restriction.

In 1973, the currencies of major western countries were decoupled from the US dollar and floating exchange rate was adopted.

In July 1974, the SDRs were decoupled from gold and converted to a basket of 16 currencies as the value setting criteria.

In September 18, 1980, the Executive Council of the fund adopted resolutions 6631st and 6708th. Since January 1, 1986, the special drawing rights have been made in the currencies of the 5 member countries of the 5 countries with the highest volume of international trade and trade in services, and the currencies of the special drawing rights have been adjusted once every 5 years. The 5 currencies have been designated as freely available currencies.

Accordingly, the composition of a basket of currencies has been reduced to 5 main currencies, namely, the US dollar, the Federal Republic of Germany Mark, the Japanese yen, the French franc and the British pound. They accounted for 42%, 19%, 13%, 13%, 13% respectively in the special drawing rights.

In 1987, the 5 currency weights in the basket of currencies were adjusted to 42%, 19%, 15%, 12% and 12% respectively.

In 2000, the euro replaced Mark and FRANC to form the current basket of special drawing rights.

Since then, the proportion of the 4 currencies has been slightly adjusted in the special drawing right currency basket, but the currency has never been increased or reduced.

More critical is the SDR.

Although it has no direct connection with the currency basket, it has been affecting the mood of the member states for many years.

It is the allocation of special drawing rights that affects not only the rights of member states in the International Monetary Fund, but also the ability of Member States to formulate economic policies.

According to the International Monetary Fund Agreement, the member states of the fund can participate in the allocation of the special drawing right voluntarily and become the participating countries of the special drawing account.

The fund stipulates that every 5 years will be a basic period for assigning special drawing rights.

In 1969, the twenty-fourth annual meeting of the fund decided the first distribution period, that is, since 1970~1972, 9 billion 500 million special drawing units have been allocated and allocated according to the proportion of fund shares allocated by Member States. The larger the share, the greater the distribution.

The industrial Communist Party shared 6 billion 997 million of the total, accounting for 74.05% of the total.

Among them, the United States received the most, accounting for 2 billion 294 million, accounting for 24.63% of the total.

This allocation method made the developing countries with the most needed funds get the least, and the developed countries got the most.

Developing countries are very unhappy about this. They have been calling for a change in this unfair "capital allocation" approach, which calls for the link between SDRs and aid, and calls for increasing the share of developing countries in the fund in order to get more special drawing rights.

There are two ways to achieve this. First, the International Monetary Fund is allocated according to the agreed share (irregular adjustment), and the two is purchased from other member countries.

The way to buy is that the member countries with actual demand apply to the International Monetary Fund, and use a basket of currencies (like withdrawals) for special drawing rights, and then the funds will arrange foreign exchange (actually a basket of currencies).

As a result, the applicant's country increased the position of the SDR (equivalent to the increase in deposits), and the position of the exchange countries in the fund correspondingly decreased.

For funds, special drawing rights exchange among Member States does not change the size of the total SDRs.

The total size of special drawing rights has increased periodically, and 5 additional issuance have been carried out in history, up to 280 billion.

The International Monetary Fund's Jamaica agreement, which came into force in April 1, 1978, is another major event following the international monetary system following the Bretton Woods Agreement after World War II. It has laid the foundation for the current international monetary system by making the floating exchange rate system legalized, implementing "gold non monetization" and expanding the use of special drawing rights in the 3 measures.

But the harsh reality has proved that the goal of the Jamaica agreement "in the future should be special drawing rights as the main international reserve assets, and finally replace the status of gold and reserve currency" is far from being realized.

Obviously, the share of foreign exchange in the world's international reserves has been as high as 80% over the years. Therefore, the main reserve of international reserve assets is foreign exchange, which is mainly the US dollar.

Unfortunately, this situation has never changed materially.

The fundamental reason lies in the rules of the game: "the same day, the same way."

Since its establishment in Washington in December 27, 1945, the International Monetary Fund has been basically under the control of developed countries for 70 years. Especially, the veto power in the hands of the United States has increasingly hindered the legitimate aspirations of newly industrialized countries and the developing countries, and has repeatedly wronged the International Monetary Fund itself.