IMF allows China's RMB in benchmark SDR currency basket

Zee Media Bureau

New Delhi: The International Monetary Fund allowed Chinese yuan to become a part of its currency reserves basket.

As per a CNBC report, the IMF evaluated China's role as an exporter and the yuan's role as a "freely usable" currency.

IMF Managing DirectorChristine Lagarde noted the currency's inclusion is a "clear representation of the reforms" taking place in China.

The addition of the yuan, or renminbi, will take effect next October.

Lagarde had supported the yuan's inclusion in the fund, known as Special Drawing Rights (SDR). It will join the euro, Japanese yen, pound sterling and dollar in the reserves basket.

The SDR determines the currency mix countries like Greece receive when the IMF disburses financial aid. The decision would likely increase demand for the yuan.