Starting Saturday Oct 1, China’s currency will be included in the International Monetary Fund’s (IMF) official foreign exchange reserves database. This comes nearly a year after the organisation gave the nod on Nov 30, 2015, for the renminbi (RMB) to join the US dollar, the euro, the pound sterling and the Japanese yen in its Special Drawing Rights (SDR) basket. Guy Harvey-Samuel, CEO of HSBC Singapore, declares the move as a “harbinger of the Chinese yuan’s elevation onto the world stage”, and a “clear recognition of its development as a global medium of exchange”.

Rising role among central banks

“Whilst SDR inclusion does not automatically translate into reserve-currency status, its role within central banks is becoming more pronounced,” says Harvey-Samuel. He highlights how HSBC’s latest annual Reserve Management Trend survey reflects a 10-fold increase in central banks that are now investing in the RMB since 2012 to 32. The study also ......