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Tuesday, 01 December 2015 - 16:53
Enter the Dragon: Chinese yuan to become global reserve currency
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The Chinese renminbi was anointed as one of the world’s elite currencies on Monday, a milestone decision by the International Monetary Fund that underscores the country’s rising financial and economic heft.

The move will help pave the way for broader use of the renminbi in trade and finance, securing China’s standing as a global economic power. Just four other currencies — the dollar, the euro, the pound and the yen — have the I.M.F. designation.

But the path to the I.M.F. decision, a bumpy process that stretches back years, also introduced new uncertainty into China’s economy and financial system.

To meet the I.M.F. requirements, China was forced to give up some of its tight control over the currency, culminating in the abrupt devaluation of the renminbi that shook global markets in August. The changes could inject fresh volatility into the country, at a time when its economy is already slowing.

The I.M.F. designation, an accounting unit known as the special drawing rights, bestows global importance.

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