The Jakarta Globe runs this article quoting a Chinese official as saying China would respect the IMF's decision on whether to include the yuan currency in the SDR basket, but was hoping for a positive outcome. The IMF has said it will announce a decision on this later this year (this article says in November), but would not make any actual changes to the SDR basket until at least September 2016. Below are some quotes from this Jakarta Globe article.
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"China is well placed to meet the criteria for inclusion in the International Monetary Fund's benchmark currency basket, the country's representative at the international lender said on Friday.
Beijing has launched a major diplomatic push for the yuan's inclusion in the IMF basket as part of its long-term strategic goal of reducing dependence on the dollar and France said on Friday it would back the bid.
Jin Zhongxia, executive director for China on the IMF's policymaking board, said China would respect the IMF's decision on whether to include the yuan currency in the Special Drawing Rights (SDR) basket, but was hoping for a positive outcome.
The yuan, also known as the renminbi, was already ranked as a top exporting currency, he said.
"More importantly, China can potentially satisfy all of the operational requirements for being a reserve currency in the SDR basket," Jin said at an Atlantic Council event. China had an active currency market, had recently liberalized interest rates and opened interbank bond markets and would soon open its currency market to foreign institutions, he said.
The IMF's executive board is scheduled to decide in November whether to add the yuan to a basket of currencies comprising dollars, euros, pounds and yen."
"More importantly, China can potentially satisfy all of the operational requirements for being a reserve currency in the SDR basket," Jin said at an Atlantic Council event. China had an active currency market, had recently liberalized interest rates and opened interbank bond markets and would soon open its currency market to foreign institutions, he said.
The IMF's executive board is scheduled to decide in November whether to add the yuan to a basket of currencies comprising dollars, euros, pounds and yen."
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My added comments:
This is an ongoing story we follow here. It's pretty clear by now that major monetary system change that could impact the average person (which is what this blog is about) is not likely to take place on a global level until the global governance issues at the IMF are resolved. With the 2010 IMF reforms stalled in the US Congress and the date for actual change to SDR basket pushed back until at least September 2016, the evidence suggests we are not on the threshold of major change right now (this fall for example).
Recent comments by BIS Chief Economist Claudio Borio imply that there are no current plans for a global central bank at this time either. His comments also agree with input I get from other sources I view as highly credible as well. There seems to be no great push right now to act on a global basis other than to try and get the various national central banks to coordinate their individual policies.
If the IMF were to actually decide not to include the yuan in November, everything probably gets pushed back even further in time. If we are on hold for awhile, we may scale back articles here somewhat since major news that would impact what we cover here is likely to be a gradual process rather than a daily process. All the evidence I have right now suggests that unless a major crisis unfolds, the kind of changes we have talked about here are more likely to be a gradual process.
While there are many who are expecting a major crisis this fall, so far it has yet to materialize and many of my sources are not indicating they expect one this fall. Here, we freely admit we have no way of knowing if and when we will get another major crisis any time soon. If one does emerge, we will see if that alters any timetable for change.
While there are many who are expecting a major crisis this fall, so far it has yet to materialize and many of my sources are not indicating they expect one this fall. Here, we freely admit we have no way of knowing if and when we will get another major crisis any time soon. If one does emerge, we will see if that alters any timetable for change.
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