The United States Softens Its Position On RMB Accession To SDR From Internationalization Of RMB

The latest "Olympic Games" can be seen as a journey of confidence and confidence. During this period, the process of RMB internationalization has been pushed forward.

Recently, Chinese President Xi Jinping visited the United States.

In the course of the meeting between the leaders of the two countries, the issue of Renminbi has become one of the key topics, and has also been included in the list of achievements of the Chinese side.

The United States reiterates that the renminbi will be included in the SDR basket in the special drawing rights (SDR) review on the premise that the renminbi meets the existing IMF standards.

The two sides promise to respect IMF's procedures and procedures in the SDR review, and to strengthen communication on the issue of RMB's accession to SDR.

It is worth noting that in November this year, it will also be the important node of IMF announcing whether RMB will be included in SDR.

"Although the IMF's" technology assessment "for the renminbi is mainly targeted at the" free use "standard (FreeUsableCriterion), the position of the US can not be ignored.

Joyd, vice president and Secretary General of the Shanghai development research foundation, said in an interview with the first financial daily.

SDR is the bookkeeping unit created by IMF in 1969 to supplement the official reserves of Member States.

Its value is determined by a basket of currencies.

At present, the SDR basket is made up of US dollars, euros, Japanese yen and sterling.

Once IMF brings the renminbi into the basket of currencies, the Central Bank of all Member States of the IMF [micro-blog] will automatically get the RMB exposure by holding SDR, which will undoubtedly be a great certainty for the internationalization of RMB.

Although SDR is not a currency, and its trading volume is very small, the SDR denominated financial products hardly exist. However, at present, SDR is regarded as a mark of the main currency value in the world. If the standard is calculated, the RMB should certainly join SDR.

As the second largest economy and the largest exporter in the world, China has huge savings and financial assets. If RMB does not enter, SDR will not be the real SDR.

The US side's stance on the renminbi's inclusion in the SDR means that the Obama administration has taken a step towards supporting China's efforts to include RMB in the global reserve currency, softening its position before "adhering to China's financial reform to win support".

In addition, the United States is committed to implementing the IMF share and governance reform plan as soon as possible in 2010, and the share allocation will be pferred to emerging markets and developing countries.

IMF's share reform in 2010 will be delayed because of the obstruction of the US Congress. Once passed, China's share of IMF will rise to 6.390% from the current 3.994%, and it will be the third largest share of IMF after the US and Japan.

The United States joins RMB.

Huang Yiping, a member of the central bank's monetary policy committee, said before: "for example, Frege Burgess, a senior official of the former US Treasury Department, pointed out that the United States did not join the Asian infrastructure investment bank (Asia Investment Bank), which was led by China, which is the biggest economic mistake ever made by the United States since World War II. Therefore, many experts believe that since a mistake has been made, it should not have committed second more offenders." (micro-blog)

In an interview with the first financial daily, Huang Yiping said that a currency has three functions: valuation, payment and storage.

Internationalization is to play three roles in the cross border market. Using the renminbi as the pricing unit of China's import and export products, as an investment and trade tool, it can make RMB the ultimate investment value.

At present, the above functions of RMB are also constantly improving.

To reporters, "the RMB's entry into the basket has a strategic symbolic significance, which will promote the cross border use of RMB in the future and increase the representativeness of SDR.

The GDP represented by Basket Currencies has been declining rapidly since 2000 (down to 40% in 2012). If the renminbi can be added to the basket, the GDP represented by basket currencies will increase significantly, and it will also greatly reduce its downward trend.

Last year, Arvind Subramanian, an Indian economist, pointed out that 7 countries in East Asia already had more than 1% dollars in currency and RMB, and the value of the renminbi rose by 1%. The currencies of these 7 countries would appreciate 0.55%, while the US dollar appreciated by 1%, and that of seven countries would only appreciate 0.34%.

In addition, the stability of SDR can be enhanced by the introduction of RMB into the basket.

If the renminbi was added to the basket in the last assessment, the exchange rate fluctuation of SDR relative to the US dollar, sterling and RMB will be greatly reduced since 2011.

According to our calculation, we can reduce 13%, 21% and 17% respectively.

Joyd said.