Today, the International Monetary Fund decided to expand the basket of major currencies to include the Chinese yuan. Such a decision can be seen as recognition of China as a world economic power.
Upon the yuan will be included in a basket of major currencies until the end of next year, but we can already observe the strengthening of the Chinese currency against this background. Now there are four basket currencies - US dollar, euro, British pound and the Japanese yen, the Chinese yuan will become the fifth.
It is worth noting that China's yuan - reserve currency - a matter of prestige, as well as part of Beijing's strategy to increase the country's role in the world economy and a kind of competition for the United States. In order to market participants appreciated the efforts of China and interpreted as a reserve currency, the yuan, Beijing will have to work hard, as long as today's decision is symbolic. Thus, Beijing will need to install a full market rate of national currency, to make the deepening of the financial system, to strengthen the economic institutions, as well as ensure a more stable economic growth in the long term.
At the moment, China has taken a lot of steps in order to match the Chinese currency other reserve currencies.
It is interesting that if China could not achieve the status of a reserve currency for the yuan, it would have a negative impact on the status of China as next year, China will chair the Big Twenty, a group of the world's largest economies. Experts say that if the IMF postponed a decision on the yuan, it is even more difficult for increased openness of the Chinese economy.
According to the Standard Charted, the new status of the yuan over five years could lead to the conversion of 1% of the foreign exchange reserves of the Federal Reserve System in assets denominated in the Chinese currency, making a total of about $ 1 trillion - about 9% of the total foreign exchange reserves of the central Bank, despite the fact that the dollar's share in them is 65%.
According to the materials WELTRADE