Business / Economy

How yuan's inclusion in currency basket will benefit public

By Liu Zheng ( Updated: 2015-12-01 16:53

As to what the impact will be on general public after IMF's inclusion of yuan into the Special Drawing Rights (SDR) basket as an international reserve currency, Yi Gang, vice-governor of People's bank of China, shared his comments during a news briefing on Tuesday. Here are some excerpts:

I've seen many media reports on renminbi joining the SDR basket, and they are excellent stories. Some of them say "the move will lighten the pressure on people's wallets", "purchasing goods around the world by yuan will become more convenient" and "cross-border investment will become easier". I think the reports and opinions are understandable.

Why does the pressure of devaluation tend to decrease after joining the SDR? In the short-term period, SDR will be loaded with symbolic significance as renminbi becomes one of the international reserve currencies of International Monetary Fund (IMF). It's a long-term advantage to endow renminbi with a higher expectation and more strict regulation.

Overall, it has raised the brand image and expectations of the currency and the renminbi will become a more stable currency, a more acceptable currency around the world and people will become more confident to hold renminbi assets.

The benefits to general public will be visible with time, and people around the world will also benefit from it. For instance, people living in Southeast Asia, which is part of the Belt and Road Initiative, will feel more convenient if they use yuan to trade and invest. It will bring economic benefits to all of us.

Hot Topics

Editor's Picks