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May 5, 2011
China PBOC's Yi: Convertible Yuan Not Needed For SDR
BEIJING (MNI) - A fully convertible yuan should not be a condition for its inclusion in the currency basket used to calculate the International Monetary Fund's Special Drawing Right, a senior People's Bank of China official said in comments published Friday.
Vice-Governor Yi Gang was also quoted by the Economic Information Daily as saying China has no "detailed timetable" for making the yuan convertible under the capital account, as the government will only allow for a stable and gradual process.
Regardless of whether the yuan joins the dollar, euro, yen and sterling in the basket, Yi said China will steadily push its convertibility.
Yi reportedly said earlier this week that the IMF should adjust the currency basket to include emerging market currencies, and give the yuan a 10% weighting.
U.S. Treasury Secretary Timothy Geithner has outlined three criteria that preclude the Chinese currency's participation in the basket.
He has expressed support for expansion of the SDR basket, but only by those countries that have flexible exchange rate systems, independent central banks, and permit the free movement of capital flows.
In its five-yearly review of the SDR basket published in February, the IMF said full convertibility is a criteria for inclusion, but also that it is an "open question" if this should continue.
But the fund also noted the yuan's link to the dollar and said its inclusion in the basket would "de facto increase the weight of the U.S. dollar in it, and allow the exchange rate policy of one country to impact the value of the SDR in a discretionary way."
China PBOC's Yi: Convertible Yuan Not Needed For SDR
BEIJING (MNI) - A fully convertible yuan should not be a condition for its inclusion in the currency basket used to calculate the International Monetary Fund's Special Drawing Right, a senior People's Bank of China official said in comments published Friday.
Vice-Governor Yi Gang was also quoted by the Economic Information Daily as saying China has no "detailed timetable" for making the yuan convertible under the capital account, as the government will only allow for a stable and gradual process.
Regardless of whether the yuan joins the dollar, euro, yen and sterling in the basket, Yi said China will steadily push its convertibility.
Yi reportedly said earlier this week that the IMF should adjust the currency basket to include emerging market currencies, and give the yuan a 10% weighting.
U.S. Treasury Secretary Timothy Geithner has outlined three criteria that preclude the Chinese currency's participation in the basket.
He has expressed support for expansion of the SDR basket, but only by those countries that have flexible exchange rate systems, independent central banks, and permit the free movement of capital flows.
In its five-yearly review of the SDR basket published in February, the IMF said full convertibility is a criteria for inclusion, but also that it is an "open question" if this should continue.
But the fund also noted the yuan's link to the dollar and said its inclusion in the basket would "de facto increase the weight of the U.S. dollar in it, and allow the exchange rate policy of one country to impact the value of the SDR in a discretionary way."
