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Yuan Joins IMF’s Reserve Currencies
China’s currency, the yuan, which is also referred as the renminbi, has been approved as a fifth currency to be recognized by the International Monetary Fund (IMF) in its special drawing rights (SDR) basket.
This places the yuan on the same grounds as the U.S. dollar, the euro, the Japanese yen and the U.K.’s pound sterling. This decision signifies that the yuan is considered a stable currency and can be used in the case of a monetary crisis in another country.
Analysts have differing opinions on what the IMF move means. The message so far is that it will give China’s yuan more political credibility. Others say it might provide more transparency into an economy that is sometimes considered less than forthcoming.
- ◦Economy
