Hong Kong welcomes IMF's 'milestone' decision on yuan
The Hong Kong Monetary Authority (HKMA) welcomed the decision by the International Monetary Fund (IMF) to include the yuan in its Special Drawing Rights (SDR) basket, which will take effect in October this year.
Hong Kong, being the largest offshore yuan trading center with close economic and trade ties with Mainland China, can continue to play a pivotal role of bridgehead and financial hub in the process of further opening up China’s financial markets and RMB internationalization, said HKMA Chief Executive Norman Chan.
The SDR is an international reserve asset created by the IMF. Its value is based on a weighted average of the value of a basket of currencies, currently comprising the US dollar, euro, pound sterling and Japanese yen. The IMF Executive Board reviews the composition of the SDR basket every five years to ensure that it reflects the relative importance of currencies in the world’s trading and financial systems.
IMF Managing Director Christine Lagarde said the decision was an important milestone in the integration of the Chinese economy into the global financial system. It recognized the progress that China has made in reforming the country’s monetary and financial systems. The yuan’s inclusion will enhance the attractiveness of the SDR by diversifying the basket and making it more representative of the world’s major currencies.