IMF inclusion of yuan ‘very live’ issue

Published March 25, 2015
The yuan is the world’s fifth most-used currency in trade, and Beijing has made almost weekly strides this year in introducing the infrastructure needed to float it freely on global capital markets. — Reuters/file
The yuan is the world’s fifth most-used currency in trade, and Beijing has made almost weekly strides this year in introducing the infrastructure needed to float it freely on global capital markets. — Reuters/file

BEIJING: Britain weighed in on Tuesday to the debate on anointing the yuan as a major reserve currency, saying the issue was “very live” after Beijing asked the IMF to include the currency in its Special Drawing Rights (SDR) basket.

The yuan is the world’s fifth most-used currency in trade, and Beijing has made almost weekly strides this year in introducing the infrastructure needed to float it freely on global capital markets.

That has increased speculation that the yuan would join the dollar, yen, pound and euro in the SDR basket, which defines the value of the IMF’s reserve asset unit. Chinese state agency Xinhua said Premier Li Keqiang had asked the head of the International Monetary Fund, Christine Lagarde, to include the yuan.

“China will speed up the basic convertibility of yuan on the capital account and provide more facility for domestic individual cross-border investment and foreign institutional investment in China’s capital market,” Xinhua paraphrased Li as saying, in a report late on Monday.

Li added that “China hoped to, through the SDR, play an active role in the international cooperation to maintain financial stability and promote the further opening of China’s capital market and financial area,” the report said.

Lagarde said on Friday the yuan would at some point be incorporated in the SDR basket but whether this was the result of this year’s five-yearly review of the basket would depend on members’ views.

The United States, worried about China’s growing diplomatic clout, has been urging countries to think twice about joining the Chinese-led Asian Infrastructure Investment Bank, or AIIB, which some see as a challenge to the World Bank and the Manila-based Asian Development Bank.

Published in Dawn March 25th , 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play

Opinion

Editorial

Judiciary’s SOS
Updated 28 Mar, 2024

Judiciary’s SOS

The ball is now in CJP Isa’s court, and he will feel pressure to take action.
Data protection
28 Mar, 2024

Data protection

WHAT do we want? Data protection laws. When do we want them? Immediately. Without delay, if we are to prevent ...
Selling humans
28 Mar, 2024

Selling humans

HUMAN traders feed off economic distress; they peddle promises of a better life to the impoverished who, mired in...
New terror wave
Updated 27 Mar, 2024

New terror wave

The time has come for decisive government action against militancy.
Development costs
27 Mar, 2024

Development costs

A HEFTY escalation of 30pc in the cost of ongoing federal development schemes is one of the many decisions where the...
Aitchison controversy
Updated 27 Mar, 2024

Aitchison controversy

It is hoped that higher authorities realise that politics and nepotism have no place in schools.