Yuan’s prospects lifted for IMF basket
The yuan’s displacement of the Japanese yen as the world’s fourth most-used currency is likely to bolster the Chinese currency’s admission to the International Monetary Fund’s (IMF) Special Drawing Rights basket of currencies, analysts said.
On Tuesday transaction services provider Swift reported the yuan’s new usage ranking.
William T. Wilson, a senior research fellow at The Heritage Foundation in Washington, noted several reasons for the greater use of the yuan: In 2013 China replaced the US as the world’s largest trading nation. The yuan, also called the renminbi or RMB, has appreciated in real terms against most currencies the past decade to make it a desirable currency because of its preservation of store of value. And with China now the largest trading partner with 75 nations (many of them in Asia), it is quickly becoming a regional reserve currency.
“These factors all increase the probability the RMB will be included in the IMF (basket) sometime soon — perhaps a year from now,’’ Wilson said in an e-mail to China Daily USA.
Wang Qiang of China watches the ball as she hits a return against Caroline Wozniacki of Denmark during their singles match at the China Open tennis tournament in Beijing on Oct 6. Wozniacki won.