The International Monetary Fund (IMF) has agreed to include the Chinese yuan in its Special Drawing Rights (SDR) basket, announced IMF Managing Director Christine Lagarde on Monday. The inclusion of RMB will take effect on October 1, 2016.
The decision, which marks a significant step in China’s global economic emergence, came after the IMF evaluated yuan’s role as a “freely usable” currency.
The Chinese yuan or renminbi (RMB) will account for 10.92% in the basket, with the other four SDR currencies’ weights being adjusted as: dollars 41.73 %, the euro 30.93 %, the pound 8.09 % and the yen 8.33 %.
This decision will move forward RMB’s role as an international currency, as more countries will be convinced to include RMB in their forex reserves. It is also an acknowledgment to China’s success in its economic reform and development, said Christine Lagarde.