(Source: VNA)

IMF decided to bring the yuan into an international currency basket

China's currency has been approved for inclusion in the basket of currencies of International Monetary Fund (IMF), the US dollar, euro, yen and sterling.

The decision came after a meeting of more than 20 leaders of the International Monetary Fund nights 30/11 (Hanoi time). Accordingly, the IMF will put yuan currency to the list of conversion of Special Drawing Rights (SDR) - currency convention of this organization. This is considered a milestone for China's efforts to influence the economic life of the world - which is dominated with the United States, Europe and Japan for several decades.

IMF press release said the decision takes effect from 01.10.2016. According to Bloomberg, this will be the influential currency 3rd largest in the basket, with the right number is 10.92%, behind the US dollar (41.73%) and the euro (30.93%). The percentage corresponds to the Japanese yen and the British pound is 8.33% and 8.09%. The rate of this allocation will affect the interest rate that the member states must pay when borrowing money from the IMF as well as different impact on the world's capital flows.

In a statement after the decision is issued, representing 188 member countries, the IMF executive board said the Chinese yuan has met the conditions of the "free use" to be present in the basket reserve currency. Previously, this information was speculation during the second half of November, after IMF Managing Director - Christine Lagarde said the agency is conducting review to make a decision.

Launched in 1969, the SDR is the currency of the IMF convention, which is used in the credit relationship between the funds with the Member States, or between countries. Once disbursed, this medium can be converted into any currency in the basket - US dollar, euro, yen, pound and yuan now - to meet the needs of the payments balance economy member.

The presence of the yuan is the latest change in the structure of the SDR since 1999, after the euro replaced the French franc and the German marks in the basket of currencies. It also marks an important milestone in the process of internationalization of yuan - the currency born after World War II and the only domestic trading for years. Under its provisions, the IMF review currency basket structure 5 years and this organization has refused to take yuan into the SDR in votes in 2010, citing the Chinese currency has not met to be the necessary conditions. /.

(Source: VnExpress)

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