by Clint Siegner
Some say the U.S. dollar may die 5 days hence. The Chinese renminbi will kill it. Much is being made of plans by the International Monetary Fund (IMF) to add the renminbi to its basket of strategic reserve currencies called Special Drawing Rights (SDR). The IMF will make the change on October 1. While the implications for the Federal Reserve Note, currently the U.S. dollar, as the world’s primary reserve currency may be profound over time and the importance of this even should not be overlooked, the impact is unlikely to happen overnight.
The composition of the SDR may change on October 1, but few people understand what the SDR is. Even fewer actually have any experience trading it. For the many who wonder what an SDR is, here is a brief description from the IMF;