China’s yuan will be added to an elite basket of global currencies used by the International Monetary Fund, in a boost to Beijing’s global economic ambitions.
Shareholders in the Washington-based IMF voted to include the yuan, also known as the renminbi, as the fifth member of its special drawing rights (SDR) currency basket alongside the dollar, the Japanese yen, sterling and the euro.
Christine Lagarde, head of the IMF, said on Monday that including the yuan in the basket was an important milestone in integrating China into the global financial system.
China had been lobbying for the IMF to add the yuan to its basket of currencies, which it uses to lend to sovereign borrowers. A vote by representatives of the IMF’s member countries to support the move marks a significant milestone for Beijing as it seeks to put the yuan on a par with the US dollar and play a growing role in global markets.
Analysts had widely expected the vote in favour of the yuan being added, after IMF staff recommended the move earlier this month. Lagarde endorsed that view, saying the yuan appeared to meet important criteria, including being deemed “a freely usable currency”.