China's yuan may enter the International Monetary Fund's benchmark currency basket at a lower weighting than previously estimated as the IMF considers rejigging the basket to better reflect financial flows, people briefed on the Fund's discussions said.

IMF policymakers are expected to add the Chinese currency to the Special Drawing Rights basket later this month, after a campaign by Beijing for the yuan, or renminbi, to have equal billing with the dollar, euro, pound sterling and yen.

Adding the yuan to the SDR basket would mark the biggest change since 1980, when the number of currencies in the basket was cut from 16.

Two people familiar with IMF deliberations said policymakers were considering changing the way the weights of currencies in the basket are calculated to make export volumes less important and financial flows more important.

China, the world's largest exporter, lags other countries in financial transactions and such a change would give China's yuan, also known as the renminbi, a lower share in the basket than under the current formula.

The yuan's inclusion is largely seen as a recognition of China's political and economic heft and as setting the seal of approval on its economic reforms and would likely not have a major impact on financial markets.

IMF staff calculated in July the yuan could have a weighting of about 14 to 16 percent and HSBC estimated it would have about 14 percent under the current formula.

One person briefed on the IMF discussions said those estimates were "too high" and a second person, an official of a major Asian country who saw a report from IMF staff to the executive board, suggested the weighting may be closer to 10 percent. "It's barely a two-digit rate, just the minimum (rate to be a double-digit one)," the official said.

The IMF's executive board, which represents the Fund's 188 members, will decide on the composition of the SDR basket on 30 November but is likely to back a thumbs-up for the yuan from IMF staff and managing director Christine Lagarde. The board will also discuss changes to the weightings.

"We have to find a way to reflect financial transactions as independent from the trade of goods and services," the first person said. "We will discuss several possibilities."

The IMF declined to comment.

The SDR basket determines the mix of currencies that countries like Greece can receive as IMF disbursements and economists expect that inclusion will boost demand for the yuan.

Last set in 2010, the basket is currently 41.9 percent dollar, 37.4 percent euro, 11.3 percent sterling and 9.4 percent yen.

IMF staff said in July there were "significant shortcomings" with the current SDR methodology, which dates to 1978, including that it did not take the large increase in financial flows into account.

ING economists reworked the formula to include measures of financial flows in July and came up with a yuan share of 9.2 percent, noting that a smaller share would be less disruptive to markets.

"It's a win-win, the CNY gets added to the basket but at a more measured pace," ING foreign exchange strategist Viraj Patel said.

The ING calculations put the yuan ahead of sterling's 7.9 percent and the yen's 7.0 percent. The euro's share would fall to 32.0 percent under the revised formula and the dollar's would rise to 43.9 percent.

Capital Economics economist Andrew Kenningham said the methodology change would impact the yuan the most, while the other countries would maintain similar ratios.

"The renminbi is completely different because despite its inclusion in the SDR, it's not really a fully convertible currency and has very thin, much less liquid markets," he said.