The Board of Directors of the International Monetary Fund (IMF) has included the Chinese yuan in the basket of the institution’s reference currency, commonly known as the Special Drawing Right (SDR).
“This decision reflects in particular the progress achieved by the Chinese authorities these years to reform their monetary and financial system“, declared CEO of IMF, Christine Lagarde.
However, the entry of the Yuan in the IMF currencies basket will become effective only as from October 1, 2016.
China has also entered into a monetary agreement with Angola making the Yuan second legal currency. Angola is the second producer of crude in Africa. The red ticket is already used as a settlement and reserve currency in several African countries including Ghana, Nigeria, Mauritius, Zimbabwe and South Africa. China has also forged currency swap agreements (swaps) with other central banks such as South Africa, Russia, Qatar, Hong Kong, Canada …) to build an international monetary system in the perspective of the free circulation and convertibility of the Yuan beyond its borders.
The SDR is actually composed of the US dollar, the Japanese yen, the Euro and the UK pounds. The last modification of the SDR currencies basket goes back to 2000 when the euro replaced the franc and the deutsche mark.