Monday, 7 December 2015

#CHINA YUAN #IMF SDR #RENMINBI (10.92%)


"Yuan joining the IMFs basket of reserve currencies bullish for bitcoin

Posted by George Samman on 4 December 2015 | Comments

Tags: Bitcoin, Price, Yuan

To facilitate the IMF's main goal of ensuring the stability of the international monetary and financial system, the Fund maintains a currency reservoir. When joining the agency, each country is assigned an initial quota, based broadly on its relative position in the world economy. Quotas are denominated in Special Drawing Rights (SDRs), the IMF’s unit of account.

The Chinese Renminbi has now been approved by the IMF for inclusion in the basket of currencies that make up SDRs. What is most surprising about this move is that the Yuan now makes up more of the basket (10.92%) than the Yen (8.33%) and the Pound (8.09%).

Lagarde“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.”

- Ms. Christine Lagarde, Managing Director of the IMF

In order to get the yuan included, China has addressed a variety of structural reforms, such as permitting more flexibility in interest rate settings, gradually opening up the capital account, and establishing a new budget law.

China has also had to devalue the yuan (vs USD) as well as cut interest rates (6 times), in order to promote economic stability as it transitions from an export driven economy to a consumer led economy."

Continues.




Sources

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