Finance
IMF Approves Chinese Yuan As Reserve Currency
IMF Approves Chinese Yuan As Reserve Currency
International Monetary Fund’s executive board, which represents 188 member nations have decided the Yuan meets the standard of being “freely usable” after years of rejection.
The Chinese Yuan will now join the Euro, Dollar, Pound and Yen as one of IMF’s Special Drawing Rights basket. The organization managing director, Christine Lagarde made this known on Monday in a statement.
The addition is expected to take effect on Oct. 1, 2016. The Yuan would weigh 10.92 percent of the basket, while the U.S dollar will represent 41.73 percent, Euro 30.93 percent, Yen and British Pounds would weigh 8.33 and 8.09 percent respectively.
The IMF reviews the composition of the basket every five years. The fund rejected the Yuan for inclusion during the last review, in 2010, saying the currency didn’t meet the necessary criteria.