The efforts of the Chinese authorities did not go unnoticed. An IMF official said that the fund is ready to add the yuan to the reserve currency basket. For now, these claims may be viewed as positive recommendations. However, with such strong support there are reasonable grounds to believe that the IMF Executive Board will approve the move. The issue will be raised at the meeting later this month. Nevertheless, even if the executives approve the step, the yuan will join the reserve currency basket no sooner than next year. The experts unanimously say that the yuan is worth becoming a reserve currency, but it must be taken into account that the IMF is actually a US institution. The United States has the majority of the votes in the Executive Board, and it will not benefit from giving the green light to the yuan, which is a prospective rival to the US dollar. Meanwhile, it is impossible to impede the yuan expansion. China’s national currency has made a long way and is now actively used as a reserve currency by many global financial institutions. Experts at Merrill Lynch say that central banks around the world currently hold a total of more than $80 billion in Chinese government bonds. The considerable volume of securities has made the yuan the seventh largest reserve currency on earth. Moreover, the recent data from SWIFT shows that the yuan displaced the US dollar from the leading position in Asia.
Therefore, over the first eight months this year, yuan has become the main payment currency between China and its neighboring countries. The second widely used currency is the Japanese yen and the third one is the Hong Kong dollar. The greenback was only ranked fourth. In terms of global trade, the yuan has become the fourth most-used currency, surpassing the yen, even though it does not enjoy the status of a reserve currency yet.
