HONG KONG — The International Monetary Fund
on Monday approved the Chinese renminbi as one of the world’s main
central bank reserve currencies, a major acknowledgment of the country’s
rising financial and economic heft.
The I.M.F. decision will help pave the way for broader use of the renminbi in trade and finance, securing China’s standing as a global economic power. But it also introduces new uncertainty into China’s economy and financial system, as the country was forced to relax many currency controls to meet the I.M.F. requirements.
The
changes could inject volatility into the Chinese economy, since large
flows of money surge into the country and recede based on its prospects.
This could make it difficult for China to maintain its record of
strong, steady growth, especially at a time when its economy is already
slowing.
The
I.M.F. will start including the renminbi in the fund’s unit of
accounting, the so-called special drawing rights, at the end of
September. The renminbi will take its place alongside the dollar, the
euro, the yen and the pound.
Many central banks follow this benchmark in building their reserves, so countries could start holding more renminbi as a result. China will also gain more influence in international bailouts denominated in the fund’s accounting unit, like Greece’s debt deal.
The
decision to include the renminbi “is an important milestone in the
integration of the Chinese economy into the global financial system,”
Christine Lagarde, the managing director of the I.M.F., said in a
statement. “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.”
China’s
leadership has made it a priority to join this group of currencies,
naming it in October as one of its highest economic policy priorities in
the coming years. The renminbi’s new status “will improve the
international monetary system and safeguard global financial stability,”
President Xi Jinping of China said in mid-November.
http://www.nytimes.com/2015/12/01/business/international/china-renminbi-reserve-currency.html
http://www.nytimes.com/2015/12/01/business/international/china-renminbi-reserve-currency.html
