China’s yuan will likely be admitted to the International Monetary Fund’s Special Drawing Rights basket,Bloomberg reported Friday. Inclusion of the yuan, also known as the renminbi, would confer de facto reserve status on the currency, something China has long coveted, and likely encourage central banks to increase their holdings of yuan reserves. IMF representatives have alerted China of the possible outcome, Bloomberg reported, citing Chinese officials with knowledge of the matter. The SDR basket currently includes four currencies, the dollar, pound, yen and euro, which together determine the value of an SDR, a reserve asset created by the IMF to smooth over liquidity issues between central banks.
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