As WantChinaTimes reports, the International Monetary Fund (IMF) should include Chinese currency renminbi (RMB) into its special drawing rights (SDR) basket as it will help reform the international financial system to reflect the growing weight of major emerging market economies, experts said. In order to serve a stable reference unit at a time of increasing exchange-rate volatility, "the SDR basket would need to be more comprehensive, including the currencies of large emerging economies, beginning with China," the experts said.
The IMF is conducting its five-year review of the SDR basket this year and will decide whether to include the RBM into its basket this fall. At the last SDR review in 2010, the RMB, or the yuan, met the export criterion, but was assessed as not meeting the "freely usable" criterion.
But the IMF has revised its stance on capital controls in recent years and major central banks have been moving toward adopting a mild form of capital controls, according to the experts, suggesting that being "convertible" should not become a key obstacle for the RMB's admission to the SDR basket.
China's market-oriented reform of the RMB exchange rate could also spur investors to advocate for a global asset, they said, noting that the US dollar has appreciated against almost every currency this year except the RMB.
The IMF formally changed its view of the RMB exchange rate in May, declaring that it was "no longer undervalued." Many experts believed that the value of RMB has reached equilibrium.