The board of the International Monetary Fund has voted to include the Chinese renminbi in its Special Drawing Right (SDR) basket as a fifth currency alongside the US dollar, euro, Japanese yen and British pound.
At its regular five-yearly review of the basket of currencies used to value the SDR, the reserve currency of the IMF, the fund decided that the renminbi met all existing conditions for it to become part of that basket, deeming it a freely usable currency from Oct 1, 2016 onwards.
Notably, the move signals recognition of China’s efforts in reforming its economy and internationalising its currency to become better integrated into the global financial system.
The inclusion of the RMB will enhance the attractiveness of the SDR by diversifying the basket and making it more representative of the world’s major currencies. Countries with currencies in the SDR basket are allocated quotas which can be used to settle IMF debts or rebalance reserves.
“The continuation and deepening of these efforts will bring about a more robust international monetary and financial system, which in turn will support the growth and stability of China and the global economy,” Christine Lagarde, managing director of the IMF said at the conclusion of the meeting.
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At its regular five-yearly review of the basket of currencies used to value the SDR, the reserve currency of the IMF, the fund decided that the renminbi met all existing conditions for it to become part of that basket, deeming it a freely usable currency from Oct 1, 2016 onwards.
Notably, the move signals recognition of China’s efforts in reforming its economy and internationalising its currency to become better integrated into the global financial system.
The inclusion of the RMB will enhance the attractiveness of the SDR by diversifying the basket and making it more representative of the world’s major currencies. Countries with currencies in the SDR basket are allocated quotas which can be used to settle IMF debts or rebalance reserves.
“The continuation and deepening of these efforts will bring about a more robust international monetary and financial system, which in turn will support the growth and stability of China and the global economy,” Christine Lagarde, managing director of the IMF said at the conclusion of the meeting.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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