IMF currency basket review of Chinese yuan set for November

Wed Nov 4, 2015 10:13am EST
 
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BEIJING/SHANGHAI (Reuters) - International Monetary Fund policymakers plan to meet in November to review whether to include the Chinese yuan in the Fund's reserve currency basket, but a specific date has not been set, the IMF said in a statement on Wednesday.

The Chinese government has set its sights on securing a place for the yuan in the Special Drawing Rights basket alongside the U.S. dollar, the euro, the British pound and Japanese yen as part of its goal of raising the international profile of the currency.

China Business News, a respected domestic finance newspaper, said on its website that the IMF was pushing back its plan to make a decision to Nov. 30 from Nov. 4.

"As we said before, the IMF Executive Board is expected to meet in November to consider the review of the SDR currency basket. The exact Board meeting date will be communicated once it has been set," an IMF spokesman said when asked about the report.

The IMF's Beijing office earlier told Reuters no date had been set for the review.

Every five years the IMF reviews the composition of the foreign currencies included in its SDR currency basket, intended to serve as a source of global financial stability and liquidity in case of financial crisis.

Many observers believe the Chinese yuan is set for inclusion this year, thanks to Beijing's concerted lobbying effort and its reforms to the country's foreign exchange market and exchange rate mechanism.

A negative outcome from the meeting might add further depreciation pressure on the yuan, complicating Beijing's attempts to hold the currency stable without draining its foreign exchange reserves too rapidly.

Currency markets did not appear to react strongly to the report, and trading volume was average.   Continued...

 
A customer counts Chinese Yuan notes at a market in Beijing, August 12, 2015. REUTERS/Jason Lee