APRIL 17, 2015 philosophyofmetrics.com
By JC Collins
During a live question and answer session at the Spring Meetings of the International Monetary Fund and World Bank, Managing Director Christine Lagarde once again reiterated that China has formally requested the inclusion of the renminbi currency in the SDR basket composition. She also stated that Chinese efforts towards economic reforms, such as opening up capital accounts, has been supporting the case for the yuan.
The expansion of the membership list of the Asian Infrastructure Investment Bank and the growing framework of the Eurasian Development Bank, with probable regional currencies, is creating additional leverage on both America and the IMF to ensure that quota and governance reforms are implemented and that the yuan is included in the upcoming SDR review.
The momentum which has built up internationally surrounding the multilateral mandates can no longer be ignored by the American administration. The yuan will only require a 70% vote to be included in the SDR composition. The US veto falls short of this which means that it is all but certain that the renminbi will be added to the global reserve basket.