Chinese yuan will be added to IMF special basket of currencies

Baku. 30 November. REPORT.AZ/ International Monetary Fund Managing Director Christine Lagarde and some two dozen officials on the fund’s executive board will gather Monday at headquarters in Washington for one of the most-anticipated decisions outside of actually approving loans for nations in crisis.

The question inside the 12th-floor, oval boardroom: whether to grant China’s yuan status as a reserve currency by adding it to the fund’s Special Drawing Rights basket. The SDR, created in 1969, gives IMF member countries who hold it the right to obtain any of the currencies in the basket - currently the dollar, euro, yen and pound -- to meet balance-of-payments needs. Report informs referring to "Bloomberg".

While there’s little suspense in the main thrust of the expected approval - Lagarde already announced that fund staff had recommended the yuan be included and that she supported the finding -- the IMF is likely to give more details on how it arrived at the decision.

The IMF’s highest decision-making body is its board of governors, a group of mostly finance ministers and central bankers from its 188 member countries. The board of governors has delegated most of its powers to the executive board, made up of 24 executive directors who represent the membership. The meeting Monday has been classified as "restricted," meaning no support staff will be allowed to attend.

The executive board, which meets more than 200 times a year, usually makes decisions based on consensus, rather than formal votes. Mark Sobel, the U.S. executive director who answers to the Obama administration, wields the most power, with a 17 percent voting stake. Together, the Group of Seven countries control 43 percent of the vote, making them a formidable bloc. China, which holds a 3.8 percent voting share, is represented by former People’s Bank of China official Jin Zhongxia.

Analythical group of Report believes that, inclusion of yuan in SDR currency basket as a reserve currency, will lead it to the free circulation into a global market.As a result, yuan will vary depending on China's economic situation.

At present, as China's economy was likely to weaken, in 2016 yuan's devaluation is expected.Next year, the exchange rate is expected to reach 7,2-7,5 CNY / USD (currently 6.4 CNY/USD ).