IMF to Hold Meeting to Determine Whether to Consider Including the RMB in the Currency Basket

IMF to Hold Meeting to Determine Whether to Consider Including the RMB in the Currency BasketThe International Monetary fund is holding s board meeting on November 30 with its focus on whether to consider the RMB should be included in the Special Drawing Rights basket. IMF Managing Director Christine Lagarde stated that the IMF staff already issued a paper last Friday to the Executive Board in the quinquennial review of the Special Drawing Rights. China’s central bank, the People’s Bank of China have also issued their on statements on their official websites that welcomes the IMFs announcement and thanking the analysis of the IMF staff on the inclusion of the RMB in the Special Drawing Rights currency basket.

The People’s Bank of China added that the inclusion of the RMB in the Currency basket would increase its representativeness and attractiveness in the Special Drawing Rights and help improve the current international monetary system benefitting China and the rest of the world. They hope that the international community supports the inclusion of the RMB in the currency basket and they are looking forward to the scheduled Executive Board discussion in November 30 and will be respecting the outcome. China will still continue to deepen economic reforms and promote financial opening up.

Based on the IMF, a key focus for the Board is to review whether the RMB is continuing to meet the export criterion for the inclusion on the SDR basket which also meets other existing criterion that will make the currency freely tradable or defined as widely used for international transactions in the principal foreign exchange markets. IMF staff assessed that the RMB already met the requirements to become a freely usable currency and based on the staff proposal, the Executive Board determines the RMB to be freely usable and include it in the SDR basket as a fifth currency together with the Euro, British pound, Japanese Yen and US Dollar.

The IMF staff also find the Chinese authorities addressed all the remaining operational issued that were identified in a initial staff meeting and analysis that was submitted to the Executive board in July.

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