diga Posted December 1, 2015 Posted December 1, 2015 The IMF will add the yuan to its basket of reserve currencies, an international stamp of approval of the strides China has made integrating into a global economic system dominated for decades by the U.S., Europe and Japan.The International Monetary Fund’s executive board, which represents the fund’s 188 member nations, decided the yuan meets the standard of being “freely usable” and will join the dollar, euro, pound and yen in its Special Drawing Rights basket, the organization said Monday in a statement. Approval was expected after IMF Managing Director Christine Lagarde announced Nov. 13 that her staff recommended inclusion, a position she supported.It’s the first change in the SDR’s currency composition since 1999, when the euro replaced the deutsche mark and French franc. It’s also a milestone in a decades-long ascent toward international credibility for the yuan, which was created after World War II and for years could be used only domestically in the Communist-controlled nation. The IMF reviews the composition of the basket every five years and rejected the yuan during the last review, in 2010, saying it didn’t meet the necessary criteria.“The renminbi’s inclusion in the SDR is a clear indication of the reforms that have been implemented and will continue to be implemented and is a clear, stronger representation of the global economy,” Lagarde said Monday during a press briefing at the IMF’s headquarters in Washington. Renminbi is the currency’s official name and means “the people’s currency” in Mandarin; yuan is the unit.The addition will take effect Oct. 1, 2016, with the yuan having a 10.92 percent weighting in the basket, the IMF said. Weightings will be 41.73 percent for the dollar, 30.93 percent for the euro, 8.33 percent for the yen and 8.09 percent for the British pound. The dollar currently accounts for 41.9 percent of the basket, while the euro accounts for 37.4 percent, the pound 11.3 percent and the yen 9.4 percenthttp://www.bloomberg.com/news/articles/2015-11-30/imf-backs-yuan-in-reserve-currency-club-after-rejection-in-2010
diga Posted December 1, 2015 Author Posted December 1, 2015 a timeline of Chinese yuan & financial reformshttp://www.bloomberg.com/news/articles/2015-11-30/a-timeline-the-chinese-yuan-s-journey-to-global-reserve-status
diga Posted December 1, 2015 Author Posted December 1, 2015 so what are the implications for India?The USD still has the largest weightage & any fluctuation in it could affect all the economies globally. Hopefully this will somewhat offset it..
bulbul Posted December 1, 2015 Posted December 1, 2015 Good for China.... our idiot's slept for last 10 years while China progressed a lot in same period.
ravishingravi Posted December 1, 2015 Posted December 1, 2015 so what are the implications for India?The USD still has the largest weightage & any fluctuation in it could affect all the economies globally. Hopefully this will somewhat offset it..no implication for India. Big implication for US.
bulbul Posted December 1, 2015 Posted December 1, 2015 Wow..Yuan have 3rd highest Weight-age....I guess soon they will reach to 3 in % as well.
beautifulgame Posted December 1, 2015 Posted December 1, 2015 The implications will be 1-2 years down the line imo.Hopefully we are prepared for it .
randomGuy Posted December 1, 2015 Posted December 1, 2015 (edited) so what are the implications for India?The USD still has the largest weightage & any fluctuation in it could affect all the economies globally. Hopefully this will somewhat offset it..I am guessing it won't affect India but will affect countries like Pak.Guessing that Yuan will strengthen due to this in long term, it will spur manufacturing in India. Pak which is an inefficient nation, can't do anything, will have to brace for costlier imports. Edited December 1, 2015 by randomGuy
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