Breaking news out of the International Monetary Fund, they have finally approved having the Chinese Currency, the Yuan in their basket of reserve currencies that make up the SDR (Special Drawing Rights) which is huge. Read more below and learn about Christine LaGarde here and here and here .
IMF’s Executive Board Completes Review of SDR Basket, Includes Chinese Renminbi
Press Release No. 15/540
November 30, 2015
Source IMF
November 30, 2015
By: Nick Giammarino
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The Executive Board of the International Monetary Fund (IMF) today completed the regular five-yearly review of the basket of currencies that make up the Special Drawing Right (SDR). A key focus of the Board review was whether the Chinese renminbi (RMB) met the existing criteria to be included in the basket. The Board today decided that the RMB met all existing criteria and, effective October 1, 2016 the RMB is determined to be a freely usable currency and will be included in the SDR basket as a fifth currency, along with the U.S. dollar, the euro, the Japanese yen and the British pound. Launching the new SDR basket on October 1, 2016 will provide sufficient lead time for the Fund, its members and other SDR users to adjust to these changes.
It’s unsure how this will affect the GCR and how what Christine Lagarde said about the reset fits into everything.
The International Monetary Fund has officially added the Chinese Yuan (Renminbi) to the SDR (Special Drawing Rights) basket of international currencies.
Blog – http://global-currency-reset.blogspot.com/
Chinese Yuan in Top 4 Global Currencies, this is huge because any currency as widely used as the Yuan should be included in the SDR.
China to share metadata with IMF, posted because this was a step in the right direction for RMB (Renminbi) internationalization and SDR inclusion
Bank of China World Currency Airport Billboard posted at the airport in Bangkok, Thailand.
IMF’s Executive Board Completes Review of SDR Basket, Includes Chinese Renminbi
Press Release No. 15/540
November 30, 2015
The Executive Board of the International Monetary Fund (IMF) today completed the regular five-yearly review of the basket of currencies that make up the Special Drawing Right (SDR). A key focus of the Board review was whether the Chinese renminbi (RMB) met the existing criteria to be included in the basket. The Board today decided that the RMB met all existing criteria and, effective October 1, 2016 the RMB is determined to be a freely usable currency and will be included in the SDR basket as a fifth currency, along with the U.S. dollar, the euro, the Japanese yen and the British pound. Launching the new SDR basket on October 1, 2016 will provide sufficient lead time for the Fund, its members and other SDR users to adjust to these changes.
#internationalmonetaryfund
#imf
This is a huge step in the right direction for China. Their economy has already surpassed the United States’ and this pushes them into new territory.
Will the US Dollar no longer become the top traded reserve currency? Time will tell.
#chineseyuan
#usdollar
#dollar
At the conclusion of the meeting, Ms. Christine Lagarde, Managing Director of the IMF, stated:
“The Executive Board’s decision to include the RMB in the SDR basket is an important milestone in the integration of the Chinese economy into the global financial system. It is also 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.”
The value of the SDR will be based on a weighted average of the values of the basket of currencies comprising the U.S. dollar, euro, the Chinese renminbi, Japanese yen, and British pound. The inclusion of the RMB will enhance the attractiveness of the SDR by diversifying the basket and making it more representative of the world’s major currencies. The SDR interest rate will continue to be determined as a weighted average of the interest rates on short-term financial instruments in the markets of the currencies in the SDR basket. Authorities of all currencies represented in the SDR basket, which now includes the Chinese authorities, are expected to maintain a policy framework that facilitates operations for the IMF, its membership and other SDR users in their currencies. The paper presented to the Board will be released soon.
Here is Christine Lagarde discussing the “reset”.
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