China's Yuan Joins World's Elite Currencies

[Purveyor]

Source: USA Today

China took another major step Monday to solidify its status as a global economic powerhouse with the International Monetary Fund agreeing to add the yuan to the world's reserve currencies.

The IMF's executive board decided to include the yuan, also known as the renminbi, in its Special Drawing Rights basket. The SDR -- which currently includes the dollar, euro, British pound and Japanese yen -- is an asset that can be exchanged for other currencies and is used by the fund to provide liquidity or emergency lending to troubled nations.

The decision to make the yuan a reserve currency "is an important milestone in the integration of the Chinese economy into the global financial system," IMF Managing Director Christine Lagarde said. "It is also a recognition of the progress that the Chinese authorities have made in the past years in reforming China's monetary and financial systems."

China has at least partly opened its notoriously insulated financial markets, allowing the central bank to set interest rates without interference from the government and promoting a freer flow of foreign capital into and out of the country.

Read more: http://www.usatoday.com/story/money/2015/11/30/imf-yuan-decision/76564820/

[davidpdx]

1. The question is whether the Chinese Government will continue to screw with the valuation of the Yuan

Now that it is part of the Special Drawing Rights basket, I'd argue they shouldn't be allowed to do that, or should any of the other countries.