China's yuan gains IMF reserve status

[wehateporn]

The International Monetary Fund (IMF) has announced that China's currency, the yuan, will join the fund's basket of reserve currencies.

Currently just the US dollar, the euro, the yen and the pound are in the group.

The IMF said the yuan ``met all existing criteria'' and should become part of the basket in October 2016.

IMF chief Christine Lagarde said it was "an important milestone in the integration of the Chinese economy into the global financial system".

She added it was also a recognition of the progress that the Chinese authorities have made in the past years in reforming China's monetary and financial systems.

The yuan will now make up part of the IMF's Special Drawing Rights (SDR) - an asset created by the IMF which serves almost as a currency.

It is used for transactions between central banks and the IMF, and is used to decide the currency mix that countries like Greece, for example, receive when the IMF provides financial aid.

The last change made to the basket was in 2000, when the euro replaced the German mark and the franc.

China is the world's second largest economy behind the US and asked for the yuan to become a reserve currency last year.

Continued China's yuan gains IMF reserve status - BBC News

[Vendot]

The Chinese yuan is becoming a central currency: 6 things you need to know - Yahoo Finance

It's just been granted reserve status by the IMF.

What this means is that the Chinese Yuan (aka RMB) is now a reserve currency, with a weighting HIGHER than the Pound or Japanese Yen. It has a weighting much lower than the USD or Euro but that's actually how it should be.

Now people will (eventually) talk about the majors as being USD, Euro and Yuan instead of USD, Euro, Pound (or Yen).
The SDR is (Special Drawing Right) is basically an IMF currency formed of a basket of the below currencies:

Official weighting info from the report - the yuan will officially become a member of the basket as of Oct. 1, 2016, and the currencies will be weighted as follows:

U.S. dollar -- 41.73%
Euro -- 30.93%
Yuan -- 10.92%
Yen -- 8.33%
Pound -- 8.09%

[adultmobile]

Originally Posted by Vendot

U.S. dollar -- 41.73%
Euro -- 30.93%
Yuan -- 10.92%
Yen -- 8.33%
Pound -- 8.09%

USD<->EUR change from 1.40 to 1.05 in less than 2 years, dropping still:

XE.com - EUR/USD Chart

Something going on.

[RummyBoy]

Originally Posted by adultmobile

USD<->EUR change from 1.40 to 1.05 in less than 2 years, dropping still:

XE.com - EUR/USD Chart

Something going on.

that's nothing to do with the CNY, its just because everyone expects USD interest rates to rise this month or if not, then early next year.