The yuan is in.
The International Monetary Fund is ready to give the green light to include the Chinese currency in the lender’s benchmark currency basket, laying the groundwork for a favorable decision by policymakers, inside sources told Reuters on Sunday.
In order for the IMF’s executive board to decide to put the yuan, also known as the renminbi (RMB) on par with the dollar, yen, euro and pound sterling it needs to be measured by IMF staff against a checklist of technical criteria. The decisions will be made in November, but no date has been set.
Three people briefed on the IMF discussions, who asked not to be named because of the sensitivity of the issue, spoke to Reuters and said a draft report from staff reached a favorable conclusion on including the yuan.
“Everything is on course technically and there is no obvious political obstacle. The report leans clearly towards including the RMB in the (basket) but leaves the decision for the board,” one of the officials told Reuters, adding that a penciled-in early November date for staff to circulate their report to board members has been pushed back by several weeks.
Two other officials said staff would recommend the yuan join the basket, which determines the mix of currencies that countries like Greece receive as part of disbursements from the IMF.
“There is no real discussion, no obstacles, all seems on course,” a second official said.
Joining the Special Drawing Rights (SDR) basket has been a long-term strategic goal of Beijing as a way of educing dependence on the dollar and to mark the country’s coming of age as an economic power.
“I think it will be very difficult for the IMF, especially given all that China has done this year, to deny China the prize it really wants,” Eswar Prasad, a professor at Cornell University and former head of the IMF’s China Division, told Reuters, adding that he could not see the US or Japan bucking a positive staff recommendation.