Ascension of the currency marks a big step in the Chinese marketThe International Monetary Fund (IMF) came to a consensus on November 30, 2015, to include the yuan in its special drawing rights (SDR) basket alongside the U.S. dollar, Japanese yen, British pound and the euro. The move marks an important step for Beijing which had been pushing for reserve-currency status to put the yuan on equal footing with the U.S. dollar and improve its standing as a key player in global financial markets.
A more robust monetary and financial systemOf the decision IMF Managing Director Christine Lagarde said, “It is also a recognition of the progress that the Chinese authorities have made in the past years in reforming China’s monetary and financial systems. The continuation and deepening of these efforts will bring about a more robust international monetary and financial system, which in turn will support the growth and stability of China and the global economy.” The IMF has largely supported the long-awaited move and added that inclusion of the yuan will make the SDR “more diverse and representative of the international community.” The addition of the currency will take effect in October 2016 with an expected weight of 10.92 percent being assigned to the yuan – topping that of the yen and pound.
A global playerChina has made great strides in recent decades to become one of the growing players on the world market. Both financially and socially. The banking and finance sectors are moving exponentially, and GDP, though slower in the past few years, is still rising far above that of developed nations. Chinese ascension to the currency basket is only further proof that the world needs to stand up and pay attention. Global investors are well aware of the opportunities that this nation brings, and more and more money is being poured into the developing services and financial sectors of this previously industry-only nation. To get in on the action, look no further than our Excel China Fund. We are the global leader in emerging markets, and our expertise ensures your money goes to the right place.