The head of the IMF said Monday he would like to consider putting the Chinese yuan into the basket of currencies that make up the Fund’s Special Drawing Rights (SDR) “the sooner the better”, but its value first needed to be freely determined by the market.
Dominique Strauss-Kahn told reporters in a news conference that he believed there would be more pressure to include yuan, also known as the renminbi, among SDR currencies as China’s economic clout grows.
“This question has to be considered. I think it will be difficult to include the renminbi before the renminbi really has a market price and is in one way or the other a floating currency. But the sooner, the better,” he said.
“Because as time goes by there are more and more reasons to include other currencies in the SDR basket — starting with the renminbi,” he added.
The IMF’s Special Drawing Rights, the Fund’s internal unit of account, has often been suggested as a global quasi-reserve currency alternative to the US dollar.
Its value is based on a basket of dollars, euros, yen and sterling.
China this month said it would resume a policy of greater exchange rate flexibility for the yuan after keeping it pegged at about 6.83 to the dollar for the past two years.
The move is expected to lead to a gradual rise in the yuan’s value against the dollar.
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