Now's the time to formulate an RMB strategy

FOLLOWING the announcement in November that the renminbi (RMB) meets the criteria of the International Monetary Fund (IMF) to become a "freely usable" currency, the IMF executive board has now formally decided to include the currency in its Special Drawing Rights (SDR) basket of currencies from October next year.

This came as no surprise to those who have followed China's unprecedented steps to open up its capital markets.

A monumental milestone for the RMB, this event will trigger significant and gradual inflows of funds into the RMB, changing the global currency landscape forever, as central banks, sovereign wealth funds (SWFs) and multilateral institutions recalibrate their balance sheets.