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IMF: Inching closer to include renminbi in SDR basket – MUFG

FXStreet (Delhi) – Lee Hardman, Currency Strategist at MUFG, notes that the FT has reported today that the IMF is creeping closer to including the renminbi in their Special Drawing Rights basket as the US and other major shareholders are likely to back the move unless the IMF staff’ makes a surprise recommendation against the renminbi’s inclusion.

Key Quotes

“The remaining technical hurdles are reportedly concerns over China’s heavy-handed intervention in markets and poor communication of reforms which are causing nervousness at the IMF.”

“The caution has reportedly prompted some IMF staff to raise the possibility that the vote by the fund’s board could be delayed from November into early next year to give China more time to deliver reforms and build credibility.”

“However, a potential delayed decision would raise questions over whether China is receiving special treatment. Chinese President Xi Jinping reassured US officials last week that there is no basis for the renminbi to have a devaluation in the long run and thanked the US for their conditional support for China’s bid to have it included in the SDR basket.”

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