- Title: IMF chief calls yuan entry into SDR an "historic milestone"
- Date: 30th September 2016
- Summary: WASHINGTON, DC, UNITED STATES (SEPTEMBER 30, 2016) (REUTERS - Broadcasters: NONE Digital: NONE) ****WARNING CONTAINS FLASH PHOTOGRAPHY*** CHRISTINE LAGARDE, MANAGING DIRECTOR (MD) OF THE INTERNATIONAL MONETARY FUND, WALKING TO PODIUM (SOUNDBITE) (English) CHRISTINE LAGARDE, MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND, SAYING: "As of tomorrow, the Renminbi will be considered by the international community as a freely usable international currency, and will join the basket of the Special Drawing Rights, together with the U.S. dollar, the euro, the yen, and the British pound. The expansion of the SDR basket is a historical milestone for the SDR, for the Fund, but more importantly for China and for the International Monetary System. (SOUNDBITE) (English) CHRISTINE LAGARDE, MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND, SAYING: "It is a significant change for the fund, because since the euro, this is the first time that a new currency is included to that basket." (SOUNDBITE) (English) CHRISTINE LAGARDE, MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND, SAYING: "It is an important step in the integration of the Chinese economy into the global, financial, and monetary system. The Renminbi's inclusion reflects the progress made in reforming China's monetary, foreign exchange and financial systems." LAGARDE WALKING AWAY FROM PODIUM
- Embargoed: 15th October 2016 20:41
- Keywords: IMF SDR Christine Lagarde Special Drawing Rights currency basket
- Location: WASHINGTON, DC, UNITED STATES
- City: WASHINGTON, DC, UNITED STATES
- Country: USA
- Topics: Government/Politics
- Reuters ID: LVA00151RF70N
- Aspect Ratio: 16:9
- Story Text: NOTE: EDIT CONTAINS WHITE FLASHES
Christine Lagarde, head of the International Monetary Fund (IMF) called on Friday (September 30), China's yuan entry to its Special Drawing Rights currency basket an "historical milestone".
"The expansion of the SDR basket is a historical milestone for the SDR, for the Fund, but more importantly for China and for the International Monetary System," said Lagarde. "It is an important step in the integration of the chinese economy into the global, financial, and monetary system".
Lagarde called it a "significant change" for the fund, as the IMF set new relative amounts of the currencies in its Special Drawing Rights currency basket, reflecting the entry of China's yuan for the first time on Saturday.
The IMF said each SDR, the Fund's unit of account, will be made up of 0.58252 U.S. dollars, 0.38671 euros, 1.0174 Chinese yuan, 11.900 yen and 0.085946 pounds sterling. The relative amounts reflect weightings determined last year based on average exchange rates over the past three months. The amounts are now fixed for five years.
The inclusion of the yuan marks the first change in the IMF's currency basket since the 1999 adoption of the euro. It also marks a significant milestone for the yuan, as the Fund has declared it to be a "freely usable currency."
"The Renminbi's inclusion reflects the progress made in reforming China's monetary, foreign exchange, and financial systems, and acknowledges the advances made in liberalizing and improving the infrastructure of its financial markets," IMF Managing Director Christine Lagarde said.
She added that continuation of these efforts will help strengthen the international monetary and financial system, which in turn will support growth and stability in China and globally.
Some contend, however, that while the step reflects progress, China has far more work to do to make its currency and economy more market-driven and open. Without this, the yuan will not achieve true reserve currency status, U.S. Treasury Secretary Jack Lew said on Thursday.
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