Yuan has become the world's fifth reserve currency

Almaty. October 3. Silkroadnews – On October 1, 2016, the Chinese currency officially became a part of the IMF currency basket, Russian media write.

«Since October 1, 2016, there will be not four, as it used to be for the last decade and a half, but five reserve currencies operating in the world: the Chinese currency has joined the basket of American, European, British and Japanese ones. This is a decision by the board of directors of the International Monetary Fund (IMF). On November 30, 2015, the board decided to respond to the request of Beijing and include the Chinese currency, the yuan, in its currency basket in 10 months», the statement said.

With this yuan immediately ranked the third world currency by value, having received a share of almost 11%. Dollar remained at approximately 40%, while the share of the euro decreased from 37% to 31%.

Currently the Chinese government artificially brings down the yuan exchange rate to boost the exports, yet in the long term, China is interested in a floating exchange rate.

«Now China is changing its development model, moving away from the growth based on exports towards the growth provided by the internal market. The growing rate of the yuan will help to facilitate such economic model», director of the Hamburg Institute of International Economics (HWWI), Professor Henning Voepel said.

However, the transition to purely market-formation of exchange rate may take China from 10 to 15 years, he adds.
Thus, the former vice-president of the Kiel Institute for the World Economy Professor Rolf Langhammer is quite skeptical about the near-term prospects of the yuan as a reserve currency.