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IMF team in China to assess reserve-currency status for yuan
June 15, 2015, 4:39 pm

China is promoting the use of its currency as an alternative to the dollar in global trade and finance and more and more nations now want to capture the fast-growing market for offshore trade in yuan, also known as the renminbi [Xinhua]

China is promoting the use of its currency as an alternative to the dollar in global trade and finance and more and more nations now want to capture the fast-growing market for offshore trade in yuan, also known as the renminbi [Xinhua]

The International Monetary Fund, which holds the key to the Chinese yuan becoming an international reserve currency through a review of its Special Drawing Rights basket, has sent a team to Beijing on Monday.

An IMF statement on Monday said the team will discuss the technical aspects of including the yuan as a reserve currency with Chinese officials.

The five-yearly review of the SDR basket is due by year-end.

IMF Managing Director Christine Lagarde has said earlier that the real question is ‘when’ not ‘if’ the yuan qualifies.

Germany, Australia and France have supported the yuan’s bid to be added.

“We’re supportive of China’s efforts to integrate its economy into the world’s economy,” Australian Finance Minister Mathias Cormann said earlier this year.

The IMF team’s preliminary assessments to label reserve-currency status for the yuan would be announced in July.

According to the IMF, selections of currencies for the SDR basket are based on two criteria – the size of the country’s exports and whether its currency is freely useable.

The SDR, an international reserve asset, currently comprises the US dollar, Japanese yen, British pound and euro.

 

TBP and Agencies

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