WASHINGTON, April 16 China's economic reform
plans, including opening up its capital account and deepening
financial markets, should help Beijing meet the IMF's criteria
to join its Special Drawing Rights currency basket, the head of
the IMF said on Thursday.
International Monetary Fund Managing Director Christine
Lagarde earlier this year said it was a question of when, not
if, China's yuan will be included in the SDR basket - currently
made up of dollars, yen, pounds and euros.
The IMF is due to review the basket's composition later this
year to assess whether any currencies meet its criteria,
including being "freely usable," or convertible - seen as a key
obstacle for the yuan, also known as the renminbi.
"The Chinese authorities know quite well what is desirable,
what needs to be changed and improved in the monetary policy and
in the financial sector in China," Lagarde said during a press
conference on Thursday.
"And I believe what the Chinese authorities have actually
indicated ... will naturally be conducive to an assessment of
whether or not the RMB (renminbi) is freely usable, which is as
you know one of the key criteria," she said.
The first step in the IMF's review of the basket for the
SDR, an international reserve asset, is an informal board
meeting in May, followed by a formal review in the autumn. Any
changes would likely come into effect in January 2016, and can
be passed by a simple majority.
The IMF could also decide to change its rules for inclusion
into the SDR, but that would require a 70 to 85 percent majority
on the 24-member executive board.
Though Beijing keeps a tight rein on the yuan's movements
and maintains strong capital controls, it is pushing for the
increased use of the yuan for trade and investment as part of a
long-term strategic goal to reduce dependence on the dollar.
(Reporting by Anna Yukhananov; Additional reporting by Randall
Palmer; Editing by Paul Simao)