Statement by Ms. Christine Lagarde on International Monetary Fund Review of SDR Basket

The move lays the groundwork for the Fund’s board, which will make the formal decision, to put the yuan on a par with the U.S. dollar, Japanese yen, British pound and euro.

On August 4 the IMF said the currency fell short of meeting all the standards for inclusion, particularly on being “freely usable” in global finance.

But she said the situation also presented a few opportunities. A key focus of the Board review is whether the Chinese renminbi (RMB), which continues to meet the export criterion for inclusion in the SDR basket, also meets the other existing criterion, that the currency be “freely usable”, which is defined as being “widely used” for global transactions and “widely traded” in the principal foreign exchange markets.

“I support the staff’s findings”.

The fund said in its semi-annual report Russian Federation would remain in recession next year, albeit a milder one than this year, while Ukraine will return to growth after a slump this year.

Ramakrishnan said a gradual economic recovery is underway in Jamaica, with growth projected at about 1.5 per cent this financial year and 2.5 per cent for the next fiscal year. The US said it would support inclusion of the yuan if it demonstrates it meets the IMF’s technical criteria. Following the recommendation of staff, the board delayed by nine months, until the end of September 2016, the implementation of any change to the basket.

In a 2009 speech, Zhou said the global financial crisis underscored the risks of a global monetary system that relies on national reserve currencies.

If the yuan’s addition wins 70 percent or more of International Monetary Fund board votes, it will be the first time the number of currencies in the SDR basket – which determines the composition of loans made to countries such as Greece – has been expanded.