02 December 2015, Lagos – The International Monetary Fund (IMF) on Monday,welcomed China’s yuan into its elite reserve currency basket, recognising the ascendance of the Asian power in the global economy.
The yuan, also known as the renminbi, will join the US dollar, euro, Japanese yen and British pound in the basket of currencies the IMF uses as an international reserve asset.
China has been lobbying for the IMF to add the yuan to its basket of reserve currencies, which it uses to lend to sovereign borrowers, The Guardian Newspaper of London reported. A vote to include the currency in the SDR basket would mark a significant milestone for Beijing, according to experts.
“The direct impact won’t be felt in the near term, not least because implementation of the new basket won’t be until Q3 2016. However the symbolic importance cannot be overlooked,” Asia Head of Capital markets at law firmLinklaters, Andrew Malcolm said.
“By effectively endorsing the renminbi as a freely useable currency, it sends a strong signal about China’s importance in the global financial markets.”
The vote of confidence in the yuan as a world reserve currency will come as welcome relief to Chinese authorities as they seek to allay investor fears about China’s economy and turmoil in its stock markets.
Meanwhile, Nigeria’s external reserves depreciated by $238 million in November to $30.012 billion as at November 27, 2015, compared with the $30.250 billion it was as at November 2.
According to the forex reserves movement figures on the Central Bank of Nigeria’s (CBN) website, the reserves derived mainly from the proceeds of crude oil sale, remained within the band of $30 billion throughout November.
- This Day