2015年CRI China Urged to Continue RMB Reform after Inclusion into SDR

 

As of October 1st of next year, the renminbi, literally¹ translated as "the people's currency," will become the fifth currency in the SDR basket, alongside the U.S. dollar, the euro, the Japanese yen² and the British pound.

Hong Hao, chief strategist at Bocom International Holdings, says the yuan's inclusion in the exclusive currency club isn't likely to have an immediate³ impact on the value of the renminbi or its use as an international reserve currency.

"We're probably going to get some central bank buying of the Chinese yuan, and also some of the Chinese government bonds after inclusion. So those benefits will come as time goes by."

The Renminbi will make up just under 11-percent of the weighting of the IMF's Special Drawing Rights basket when it's finally included.

The value of the US dollar will account for just under 42-percent of the SDR value, while the euro will make up around 31-percent.

The yen and the British pound will make up the rest, each with just over 8-percent of the SDR's weighted value.

Till Engelhard, with the Bank of China's Frankfurt Branch, says the nearly 11-percent weighting of the RMB will make it more preferred by central banks and investment organizations in their investment portfolios⁴.

"It also becomes more secure for the central banks to work with the renminbi, as central banks are also IMF members. So when they deal with China, they can do so using the renminbi to conduct interbank transactions. If there are balance of payments needs to cover, IMF members will have the right to draw the renminbi from the Chinese central bank depending on how much they're holding within the SDR. Central banks will also be able to trade in the renminbi."

The Chinese government has been touting⁵ the inclusion of the renminbi into the SDR basket as a milestone⁶ in its push to make the Chinese currency more international.

Economist⁷ Wang Dan with the Economist Intelligence Unit says the tangible⁸ benefits to the renminbi being added to the SDR will be limited.

"Joining the SDR, especially joining rights, is actually more symbolic⁹ than substantial. It's going to gain recognition from the global market that the IMF recognizes it as an international reserve currency."

Many observers say it’s the market itself, rather than the renminbi's addition to the SDR basket, will determine whether or not the yuan will become a major global reserve currency.

Not every currency included in the SDR basket becomes a major reserve currency.

The Japanese yen is included in the SDR weighting because of the strength of the Japanese economy.

However, central banks don't use the yen as a reserve currency because of its vunerability to fluxuations in value.

Observers are suggesting a further opening up of the Chinese financial markets, as well as increasing market transparency will be needed to convince central banks around the world that the Chinese currency is a good bet.

For CRI, This is Luo Wen.

1 literally   

adv.照字面意义，逐字地；确实

参考例句：

• He translated the passage literally.他逐字逐句地翻译这段文字。
• Sometimes she would not sit down till she was literally faint.有时候，她不走到真正要昏厥了，决不肯坐下来。

2 yen   

n. 日元；热望

参考例句：

• He wanted to convert his dollars into Japanese yen.他想将美元换成日币。
• He has a yen to be alone in a boat.他渴望独自呆在一条船上。

3 immediate   

adj.立即的；直接的，最接近的；紧靠的

参考例句：

• His immediate neighbours felt it their duty to call.他的近邻认为他们有责任去拜访。
• We declared ourselves for the immediate convocation of the meeting.我们主张立即召开这个会议。

4 portfolios   

n.投资组合( portfolio的名词复数 )；（保险）业务量；（公司或机构提供的）系列产品；纸夹

参考例句：

• Price risk arises in non-trading portfolios, as well as in trading portfolios. 价格风险中出现的非贸易投资，以及在贸易投资组合。 来自互联网
• How do we fatten our portfolios and stay financially healthy? 我们怎样育肥我们的投资结构和维持财政健康呢？ 来自互联网

5 touting   

v.兜售( tout的现在分词 )；招揽；侦查；探听赛马情报

参考例句：

• He's been touting his novel around publishers for years. 他几年来一直到处找出版商兜售自己的小说。 来自《简明英汉词典》
• Technology industry leaders are touting cars as a hot area for growth. 科技产业领袖吹捧为增长热点地区的汽车。 来自互联网

6 milestone   

n.里程碑；划时代的事件

参考例句：

• The film proved to be a milestone in the history of cinema.事实证明这部影片是电影史上的一个里程碑。
• I think this is a very important milestone in the relations between our two countries.我认为这是我们两国关系中一个十分重要的里程碑。

7 economist   

n.经济学家，经济专家，节俭的人

参考例句：

• He cast a professional economist's eyes on the problem.他以经济学行家的眼光审视这个问题。
• He's an economist who thinks he knows all the answers.他是个经济学家，自以为什么都懂。

8 tangible   

adj.有形的，可触摸的，确凿的，实际的

参考例句：

• The policy has not yet brought any tangible benefits.这项政策还没有带来任何实质性的好处。
• There is no tangible proof.没有确凿的证据。

9 symbolic   

adj.象征性的，符号的，象征主义的

参考例句：

• It is symbolic of the fighting spirit of modern womanhood.它象征着现代妇女的战斗精神。
• The Christian ceremony of baptism is a symbolic act.基督教的洗礼仪式是一种象征性的做法。