IMF approves China's yuan as elite reserve currency

Move gives international recognition to renminbi, fund's Christine Lagarde says

IMF approves China's yuan as elite reserve currency

World Bulletin / News Desk

The International Monetary Fund (IMF) had agreed to include the Chinese renminbi in its basket of leading currencies, the organization announced Monday.

The renminbi, also known as the yuan, will be added to the group of currencies that contribute to the value of the special drawing right (SDR) used to price emergency loans, the IMF said in an emailed statement.

China’s currency will be added to the list, which currently includes the U.S. dollar, the euro, the Japanese yen and the British pound, from Oct. 1, 2016.

According to Benjamin J. Cohen, professor of international political economy at the University of California, the renminbi’s addition is an important step in international recognition.

In a note published on Nov. 19, Cohen said the renminbi’s inclusion was widely expected.

“The executive board's decision to include the renminbi in the SDR basket is an important milestone in the integration of the Chinese economy into the global financial system,” IMF Managing Director Christine Lagarde said in the statement.

“It is also a recognition of the progress that the Chinese authorities have made in the past years in reforming China’s monetary and financial systems. 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.”

Güncelleme Tarihi: 13 Aralık 2016, 08:49