The inclusion of the RMB in the International Monetary Fund's (IMF) Special Drawing Rights (SDR) basket means that the currency is “freely usable,” said a senior IMF official on Oct. 5.

Zhang Tao, deputy managing director of the IMF, said that the inclusion of the RMB makes the composition of the SDR basket more representative of the currencies currently being traded in the world. Speaking at a forum held in Washington, D.C. by the Peterson Institute for International Economics and China Finance 40 Forum, Zhang said that the inclusion of China's RMB in the SDR will strongly support China's continued efforts to reform its monetary, foreign exchange and financial systems, and help facilitate China's increased integration into the global financial community.

Zhang said that the inclusion will speed the internationalization of the RMB, as currency internationalization can encourage the development of deeper and more liquid financial markets.

The IMF is working toward the broader use of the SDR, including the issuance of SDR-denominated bonds and broader reporting in SDR terms, Zhang explained at the conference.

In November 2015, the IMF executive board announced its decision to include the RMB in the SDR basket, joining the U.S. dollar, the euro, the British pound and the Japanese yen. That decision took effect on Oct. 1.