IMF ADDS CHINA’S RENMINBI TO ELITE RESERVE CURRENCIES

Washington, 19 Safar 1437/01 December 2015 (mina) – The International Monetary Fund moved Monday to add China’s renminbi to the currencies that the crisis lender uses as a measure of value, alongside the dollar, euro, yen and pound sterling.

The vote by the IMF’s executive board puts the Chinese economy into an exclusive club of countries with reserve currencies, Mi’raj Islamic News Agency (MINA) quoted SPA as reporting.

China, which has grown rapidly in recent decades to become the world’s second-largest economy, has long sought to make the renminbi into a global reserve currency, including the IMF designation.

IMF chief Christine Lagarde called the decision ‘an important milestone in the integration of the Chinese economy into the global financial system.’

An IMF staff report in early November recommended that the renminbi be placed into the Washington-based IMF’s so-called currency basket, a weighted daily average of the market exchange rates of the now-five currencies, which is more stable than any of the individual major currencies alone.

The average is used as a measure of value for the IMF’s ‘special drawing rights,’ which quantify how much reserve currency each of the 188 member countries can call on.

The executive board decided that the renminbi ‘met all existing criteria and … is determined to be a freely usable
currency’ to be included in the currency basket beginning on October 1, 2016, the IMF said.

Lagarde called the vote ‘a recognition of the progress that the Chinese authorities have made in the past years in
reforming China’s monetary and financial systems. The continuation and deepening of these efforts will bring about a more robust international monetary and financial system, which in turn will support the growth and stability of China and the global economy.’ (T/R07/R01)

Mi’raj Islamic News Agency (MINA)