Saturday, October 24, 2015

IMF Decision on Adding Yuan to SDR Basket Likely Soon

The IMF is apparently hinting that an announcement on adding the yuan to the SDR currency basket is coming soon. Below are links to articles about it.


Yahoo News/Bloomberg video - IMF Decision Next Week?

Sputnik News - IMF Signals Posssible Approval on Renminbi

"As China gradually dismantles its mechanisms of planned economy in regard to currency market and monetary policies, the IMF and the US change their attitudes toward the renminbi’s inclusion in the Fund’s reserve currency basket from the utterly negative to favorable somewhat."

Forex Live - IMF Said to Give China Strong Signal on Yuan

"The IMF has told China that the yuan is likely to be included in the SDR reserve currency basket soon.
Officials are so confident of winning approval, they've begun preparing statements to celebrate the decision.
188 member nations use the SDR basket but the IMF is looking into convertibility issues.
This isn't a surprise. The IMF has been giving signals that it would be accepted. However, it could create a small tailwind for the yuan, which is something China would want to avoid.
From my perspective, I don't understand why the IMF is doing this before China allows full convertibility."

Bloomberg - IMF Said to Give China Strong Signs

"International Monetary Fund representatives have told China that the yuan is likely to join the fund’s basket of reserve currencies soon, according to Chinese officials with knowledge of the matter, a move that may make more countries comfortable using the unit or including it in their foreign-exchange holdings.
The IMF has given Chinese officials strong signals in meetings that the yuan is likely to win inclusion in the current review of the Special Drawing Rights, the fund’s unit of account, said three people who asked not to be identified because the talks were private. Chinese officials are so confident of winning approval that they have begun preparing statements to celebrate the decision, according to two people."

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