The Suez Canal Authority is considering adding the Chinese yuan currency within the approved currency basket to collect transit fees, after the International Monetary Fund (IMF) added the currency to the Special Drawing Rights (SDR).
Sources told Daily News Egypt, on condition of anonymity, that the Suez Canal Authority collects transit fees in nine currencies to provide payment flexibility to customers. These currencies are the US dollar, Canadian dollar, Japanese yen, British sterling pound, euro, Danish krone, Norwegian krone, Swiss franc, and Swedish franc.
They said that there is a difference between adding the Chinese currency to SDRs and accepting it as transit fees. They explained that the IMF is responsible for choosing currencies within SDR, based on their spread in global transactions and the weight of the country in international trade.
Meanwhile, the Suez Canal Authority uses SDRs according to the developments conducted by the IMF without interfering with the IMF’s decisions. The Suez Canal Authority uses SDRs as an indicator to evaluate collection fees and collect them in the nine approved currencies.
An SDR unit is equivalent to $1.39581, according to a basket of currency exchange rates as of 30 September, which was the last time SDRs were given a value.
The sources stressed that the addition of the yuan may constitute an advantage for ships coming from China, especially as ships from Asia constitute 50% of the transiting ships on a daily basis.
The Suez Canal Authority resorts to the SDR unit to create a balance between the movements of the exchange rate and hedge against any fluctuations in any currency that could impact revenues of the canal.