The International Monetary Fund has finally recognized China’ national currency as another reserve currency, Market Leader reports. On top of that, it is reported that from now on, the Renminbi is going to be included into periodical reports on reserve currencies that made the currency preserves of IMF member nations. Still, the Renminbi data are going to be included in a separate column. The current report includes, the U.S. Dollar, the Australian Dollar, the Japanese Yen, the Swiss France, and the British Pound.
This means that IMF member nations are allowed to officially include the Renminbi they own in their currency reserves. According to the IMF, those chances are not going to affect China’s currency reserves. They are going to be valued as always. The thing is that the Renminbi is not a foreign currency in China, which is why the country’s money supply is not going to be taken into account.
Even though the International Monetary Fund has already recognized the new status of the Chinese Yuan, it is going to take effect only in the mid fall of 2017. According to Chinese authorities, they are planning to improve the mechanism of determining the Renminbi exchange rate in order to make it more stable over the long term.
