Central Banking

The renminbi’s rise to prominence: focus report 2021

The Special Drawing Rights (SDR) is an international asset created by the International Monetary Fund (IMF) in 1969 to supplement its member countries reserve assets. Since its creation, a number of international currencies have been added to the SDR basket, reflecting the changes in the international financial system.

Currently, the value of the SDR is based on a basket of five currencies: the US dollar, euro, Japanese yen, British pound, and Chinese renminbi, which was the last currency to be added in 2015. The SDR is reviewed by the IMF every five years; the latest review, however, was delayed by the IMF’s executive board until July 2022 following the outbreak of Covid-19.

In this report, Central Banking explores what impact the addition of the renminbi to the SDR basket has had on internationalising the Chinese currency; central bank reserve managers share their views on including the renminbi in their portfolios; and we take a look at whether easing capital controls, or the introduction of a central bank digital currency, may bolster the renminbi’s standing further.

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The evolution of the renminbi

Central Banking speaks to five policy-makers about their thoughts on the prominence of the renminbi within central bank reserves following its inclusion in the International Monetary Fund’s special drawing rights.

China’s capital controls: here to stay?

With China’s share of the domestic central government bond market significantly increasing in just a few years, and the International Monetary Fund including the renminbi in its special drawing rights basket of currencies, China is enjoying growing…

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