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Saturday, October 1, 2016, 10:53

China vows further financial reforms after SDR inclusion

By Xinhua

China vows further financial reforms after SDR inclusion
International Monetary Fund Managing Director Christine Lagarde (center) poses with the Chinese team at IMF on Friday after announcing the launch of the new IMF Special Drawing Right (SDR) valuation basket that includes the Chinese currency yuan for the first time. (Chen Weihua/China Daily)

BEIJING -- China's central bank said Saturday that the country will continue to push financial reforms and market opening after the inclusion of its currency renminbi into the International Monetary Fund's (IMF) Special Drawing Right (SDR) currency basket.

The IMF on Friday announced the launch of the new SDR basket including the yuan, effective from Saturday, saying it was a "historic milestone" for China, the IMF and the international monetary system.

China welcomes the move, which will strengthen the representativeness, stability and attraction of the SDR while advancing the reform of the international monetary system, the People's Bank of China said in a statement on its website.

Inclusion of the renminbi, or the yuan, into the SDR represents a milestone in the internationalization of the yuan and a recognition of China's progress in economic development as well as financial reforms and opening up, the central bank said.

The SDR is an international reserve asset created by the IMF in 1969 to supplement its member countries' official reserves. It can be exchanged among governments for freely usable currencies in times of need.

Last November, the IMF decided to include the yuan in the SDR basket as a fifth currency, effective Oct 1, 2016.

The executive board of the IMF on Friday also decided the weight of each currency in the new SDR basket, with the yuan being 10.92 percent, the US dollar 41.73 percent, the euro 30.93 percent, the Japanese yen 8.33 percent and the pound Sterling 8.09 percent.

The percentage will remain fixed over the next five years until the next review of the SDR basket.

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