Yuan elevated to elite club of currencies
The IMF approved the yuan as the fifth elite currency to join the special drawing rights basket (SDR), which is a foreign exchange reserve asset that includes the US dollar, euro, yen and the British pound.
“The RMB’s acquisition of SDR status marks a milestone, which is equivalent to that of China's entry into the World Trade Organization in 2001,” said He Zhicheng, former senior economist with the Agricultural Bank of China.
Rising demand for yuan assets brought by inclusion in the SDR basket will push China to deepen reform and the internationalization of yuan, at a time when China is becoming more integrated into the global market, according to Zhao Xueqing, an economist with the Institute of International Finance, a think tank affiliated with the Bank of China.
The renminbi has leapfrogged other currencies to occupy the third-largest share of the new SDR basket at 10.92 percent, following the US dollar's 41.73 percent and the euro’s 30.93 percent.