WASHINGTON - China's yuan does not meet the criteria required for inclusion in the International Monetary Fund's (IMF) Special Drawing Rights (SDR) valuation basket made up of the US dollar, euro, yen and the British pound, the fund said yesterday.
IMF directors urged the issue be kept under review, according to an emailed statement, which also signalled that the fund will begin next year an examination of the indicators used to select currencies.
"Although China has become the third-largest exporter of goods and services on a five-year average basis and has taken steps to facilitate international use of its currency, the Chinese yuan doesn't currently meet the criteria to be a freely usable currency," the IMF said.
The yuan has gained 2.8 per cent versus the greenback after China scrapped a two-year peg on June 19 as policy makers responded to accelerating inflation and pressure from the US to allow appreciation.
The G-20 nations will discuss including China's yuan in the currency basket for SDRs when it meets next year in France, Yonhap News reported, citing South Korean officials it did not identify.
The IMF this week cut the greenback's weighting in the SDR to 41.9 per cent from 44 per cent. The yen's weighting dropped to 9.4 per cent from 11 per cent, the euro's share rose to 37.4 per cent from 34 per cent, while the pound's rose to 11.3 per cent from 11 per cent. Agencies
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