China made a fresh push for its yuan currency to be included in the International Monetary Fund’s benchmark currency basket on Friday and argued that recent reforms put it closer to qualifying.
Beijing is pushing for the yuan, also known as the renminbi (RMB), to be included in the IMF’s Special Drawing Rights basket as part of its long-term strategic goal of reducing dependence on the dollar.
In an address to the IMF’s main advisory committee, China’s deputy central bank governor, Yi Gang, sought to reassure trading partners about yuan weakness and said reforms to make the currency more flexible would continue.
The IMF’s executive board is scheduled to decide in November on adding the yuan to a basket of currencies comprising dollars, euros, pounds and yen, a move which would be an important marker for China’s economic coming of age.
One of the criteria is that the yuan be “freely usable,” or widely used to make international payments and traded on foreign exchange markets. IMF staff in August also said the yuan had a way to go to meet operational requirements, allowing IMF members to use yuan-denominated instruments to manage reserve holdings and hedge risks.
Yi said in a statement to the International Monetary and Financial Committee (IMFC) that steps to improve the transparency of Chinese data, develop representative foreign exchange and interest rates and open interbank markets helped address operational concerns.
“We believe that with the completion of these reforms, the RMB can meet the operational requirements for inclusion in the SDR basket,” he said. “More efforts will likewise be made to continuously facilitate the international use of the RMB.” Read more