1 October 2016, Washington, D.C.: the Yuan, the PRC’s currency, joined the dollar, euro, yen and British pound in the “special drawing rights” (SDR) basket that forms the IMF’s unit of account. These basket is known as “renminbi”.
Being part of the SDR basket at the IMF is quite a ways away from being a global reserve currency yet according to the IMF’s Managing Director, Christine Lagarde the “expansion reflects the ongoing evolution of the global economy and is a significant change for the IMF”.
This is the first time since the adoption of the Euro that a currency is added to the basket. Moreover reality is being reflected as the PRC’s accounts now for 17,3 % of the global economy against the 15,8 of the USA.
Ms Largarde added in the IMF’s press release that “The Renminbi’s inclusion reflects the progress made in reforming China’s monetary, foreign exchange, and financial systems, and acknowledges the advances made in liberalizing and improving the infrastructure of its financial markets. The continuation and deepening of these efforts, with appropriate safeguards, 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”.
For further information:
On the relevance of the Yuan’s inclusion as renminbi: http://video.cnbc.com/gallery/?video=3000556016
IMF: https://www.imf.org/external/np/fin/data/rms_sdrv.aspx
