The Conference Board uses cookies to improve our website, enhance your experience, and deliver relevant messages and offers about our products. Detailed information on the use of cookies on this site is provided in our cookie policy. For more information on how The Conference Board collects and uses personal data, please visit our privacy policy. By continuing to use this Site or by clicking "OK", you consent to the use of cookies. 

China Center Quick Note: The RMB’s Rise -- IMF SDR Inclusion


October 2016 | China Center Publications

Following a multiyear Chinese campaign to have the RMB added into the basket of currencies that underlie the Special Drawing Rights, the IMF relented on November 30, 2015, and formally adopted China’s currency on October 1, 2016. However, the adoption of the RMB into the SDR is not a game changer for international finance. Any increase in demand for China’s currency by central banks, at least at first, will likely be done to diversify currency reserves. We do not expect to see any significant changes in the structure of official global reserves. While the IMF has granted the RMB "reserve currency" status, it has not and cannot deem it a "safe haven" currency. That title is bequeathed by global investors, not institutions, and it is extremely unlikely that the RMB will inspire the prerequisite confidence anytime soon – if ever.

Interestingly, however, just before the October 2016 SDR adoption, the World Bank’s IBRD received PBoC’s blessing to issue SDR-denominated bonds in China’s interbank market. While not a part of the IMF SDR onboarding process, the two events are linked.


AUTHOR

ErickLundh.jpg

Erik Lundh

Senior Economist
The Conference Board


Support Our Work

Support our nonpartisan, nonprofit research and insights which help leaders address societal challenges.

Donate
FILTER BY CENTER

Our Experts

DavidHoffman1.jpg

David Hoffman

Senior Vice President Asia and Managing Director of the China Center for Economics & Business

AndrewPolk.jpg

Andrew Polk

Co-founder and Head of Economic Research

EthanCramerflood.JPG

Ethan Cramer-Flood

Senior Fellow, China Center for Economics and Business

ErickLundh.jpg

Erik Lundh

Senior Economist

OTHER RELATED CONTENT