[WASHINGTON] The IMF said Wednesday that it had extended by nine months the scheduled revision of its elite currencies basket, giving more time for adjustment to the potential inclusion of China's yuan.
The move prolongs from year-end until September 30, 2016, the official update of the "special drawing rights" (SDR) basket, which takes place only every five years.
The review would adjust the weightings of the four powerful currencies involved - the dollar, yen, euro and pound - but this time also could mean adding the yuan, also known as the renminbi (RMB), to the mix as well.
China, now the world's second-largest economy, asked last year for the yuan to be added to the grouping.
On August 4, the IMF said the currency, which has been tightly managed by the Chinese central bank, fell short of meeting all the standards for inclusion, particularly on being "freely usable" in international finance.
However, a senior IMF official at the time said that he expected changes in that situation by the time an official board decision on the yuan's inclusion was expected in November.
One week later, indeed, Beijing both devalued the currency and moved to let it float more broadly, allowing it to respond further to market forces, which the IMF holds as an important condition for SDR currencies.
The IMF did not mention the yuan in its statement Wednesday, but explained that the update extension was a response "to feedback from SDR users on the desirability of avoiding changes in the basket at the end of the calendar year." "The extension would also allow users sufficient lead time to adjust in the event that a decision were to be taken to add a new currency to the SDR basket." While not a freely traded currency, the SDR is important as an international reserve asset, and because the IMF issues its crisis loans, crucial to struggling economies like Greece, valued in SDRs.
IMF Managing Director Christine Lagarde said last year that the yuan's inclusion is a matter of "when" rather than "if".