According to reports over the weekend the International Monetary Fund will commence deliberations this week about adding the Chinese yuan to the basket of currencies which make up the fund’s international reserve asset, known as special drawing rights.
After a turbulent few weeks in the Chinese markets Beijing will be hoping for some positive news. China has been pushing strongly for the change and as the worlds second largest economy must feel the time is now right.
The IMF board is due to meet on Wednesday to start discussing whether to add the yuan to the basket currently composed of the U.S. dollar, the euro, the British pound and the Japanese yen aiming to reach a conclusion by the end of this year.
As was the case with the recent formation of the Asian Infrastructure Investment Bank Japan and the United States are hesitant to support the change. Japan cited transparency of the AIIB as a problem however the recent Toshiba reporting scandal may have diluted their angle on that argument.
Other reports have said that France, Germany and Britain are pushing for it believing the inclusion would encourage free trade of the yuan. Addition of the yuan into the currency basket was first discussed in 2010 but was not approved at that time.
