Why is China most likely considering a greater reliance on the SDR?
A)gains in the foreign-exchange market
B)concerns about the value of the U.S. dollar
C)demands to replace the dollar with the euro for reserves
D)requirements by the IMF to make China's currency more flexible

Question

Quizplus · Accepted Answer

China may be considering a greater reliance on the SDR as a way to reduce its exposure to the U.S. dollar, which it sees as vulnerable to fluctuations in the global economy, trade tensions, and other factors. Moving toward the SDR, which is a basket of currencies including the U.S. dollar, could help China diversify its foreign-currency reserves and reduce its dependence on any one currency. This is particularly important as China seeks to promote the internationalization of its own currency, the yuan, which has been subject to IMF requirements to make it more flexible.

Why Is China Most Likely Considering a Greater Reliance on the SDR