DHAKA: The International Monetary Fund (IMF) has approved China’s yuan into its elite reserve currency, in a decision described as ‘an important milestone’ for the world’s second largest economy.

With the decision, the yuan, also known as the renminbi, will join the US dollar, euro, Japanese yen and British pound next year in the list of currencies the IMF uses as an international reserve asset.

Christine Lagarde, IMF managing director, called the decision ‘an important milestone in the integration of the Chinese economy into the global financial system’.

‘It is also recognition of the progress that the Chinese authorities have made in the past years in reforming China’s monetary and financial systems,’ she said, reports Al Jazeera.

The decision by the IMF executive board solidifies China’s ambition to see the government-controlled yuan achieve global status as one of the world’s top currencies alongside the US, Europe and Japan.

China asked last year for the yuan to be added to the Fund’s Special Drawing Rights list.

As recently as August, the IMF considered the currency too tightly controlled to qualify.

However, IMF staff experts in early November said that China had taken the steps necessary for the yuan to be called ‘freely usable’, opening the way for Monday’s decision.

BDST: 1253 HRS, DEC 01, 2015
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