(Bloomberg) -- International Monetary Fund Managing Director Christine Lagarde called this week's addition of the yuan to the lender's basket of elite currencies a “historic milestone” while urging China to keep opening up and improving its financial system to help both its own economy and the world's.
“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,” Lagarde said in a statement on Friday in Washington. “The continuation and deepening of these efforts, with appropriate safeguards, will bring about a more robust international monetary and financial system, which in turn will support the growth and stability of China and the global economy.”
The IMF last year approved adding the yuan to the dollar, euro, pound and yen in the basket of reserve currencies known as Special Drawing Rights, which could boost use of China's unit in international reserve holdings. While the SDR isn't technically a currency, it gives IMF member countries who hold it the right to obtain any of the currencies in the basket to meet balance-of-payments needs.
To contact the reporter on this story: Scott Lanman in Washington at slanman@bloomberg.net. To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, Ben Holland, Larry Liebert
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