The renminbi (RMB) was found to be meeting all existing criteria and determined to be a freely usable currency, thus will be included in the SDR basket as a fifth currency, along with the U.S. dollar, the euro, the Japanese yen and the British pound, said Lagarde in her statement.
“The Executive Board's decision to include the RMB in the SDR basket is an important milestone in the integration of the Chinese economy into the global financial system” said Lagarde.
“It is also a recognition of the progress that the Chinese authorities have made in the past years in reforming China's monetary and financial systems. The continuation and deepening of these efforts will bring about a more robust international monetary and financial system, which in turn will support the growth and stability of China and the global economy” she added.
According to the statement, share of yuan in the basket was declared 10.92 percent in accordance with expectations, while euro's share was cut more than the score of 6 percent. Accordingly, share of euro declined from 37.4 percent to 30.93 percent, while share of yuan will be higher than sterling which is at 8.09 percent share, and yen that is at 8.33 percent. Dollar's share was declared 41.73 in the basket, with a slight change.
Chinese officials have recently implemented some reforms to ease the access of foreigners to Chinese foreign currency market, including the increase of bond issue and extending transaction hours for yuan.
Chinese Central Bank welcome the inclusion of RMB in the basket in a written statement. China will speed up the promotion of financial reform and make positive contribution to global economic growth, financial stability, and economic governance, said the statement.