IMF to include Chinses Yuan in Elite Reserve Currency basket

BEIJING: China’s yuan will be added to an elite basket of global currencies used by the International Monetary Fund IMF, in a boost to Beijing’s global economic ambitions. Shareholders in the Washington-based IMF voted to include the yuan, also known as the renminbi, as the fifth member of its special drawing rights (SDR) currency basket alongside the dollar, the Japanese yen, Pound sterling and the Euro. Christine Lagarde, head of the IMF, said on Monday that including the yuan in the basket was an important milestone in integrating China into the global financial system. “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. China had been lobbying for the IMF to add the yuan to its basket of currencies, which it uses to lend to sovereign borrowers. A vote by representatives of the IMF’s member countries to support the move marks a significant milestone for Beijing as it seeks to put the yuan on a par with the US dollar and play a growing role in global markets. The SDR basket is typically reviewed every five years by the IMF’s executive board to ensure it “reflects the relative importance of currencies in the GLOBAL TRADING and financial systems”. Source: The Guardian