China’s currency joins club of dollar, euro, yen and pound. Together they decide special withdrawal rights from international organization’s reserves. The decision will take effect from 1 October 2016.

Beijing (AsiaNews / Agencies) - After about a month of technical evaluation, the IMF has approved the inclusion of the yuan renminbi - the "people's currency" of China – among its reserve currencies. The decision was reached yesterday evening by the IMF Executive Board, composed of representatives from member countries of the Washington institution. The yuan now joins the dollar, euro, yen and pound as part of group with special withdrawal rights against the reserve currency of the same Fund.

The decision will be effective from October 1, 2016, to allow an orderly transition and not shake the currency markets. The approval came thanks to the recommendation of the IMF technical staff which claim that the yuan now satisfies the requirements of being a currency widely and "freely used  in international trade. Critics claim however, that its liberalization has not been approved long enough to allow these definitions.

According to sources in Beijing, the inclusion of the yuan in the reserve currencies is somehow "a reward" for the IMF’s failure to increase the share value and an attempt by the leadership of the Fund to maintain good relations with China, the second largest economy in the world. It is also a sign of confidence that the Chinese authorities will continue on the path of economic reforms, some of which were specifically in relation to the admission of the currency among DSP, at a time when the economy is slowing down and the turmoil in financial markets have affected Chinese and world prices, also because of the uncertainty of Beijing’s response.

• china
• IMF
• yuan
• reserve
• currencies
• economy