Companies must include the yuan in their business planning

MONDAY'S inclusion of the renminbi in the Special Drawing Rights (SDR), a reserve asset managed by the International Monetary Fund (IMF), is a major milestone in China's mission to globalise its currency. The decision has been a long time coming, and has effectively granted the status of global reserve currency to the renminbi.

At first glance, it looks like the kind of development that should be of primary interest to central bankers, who will be thinking about how to reallocate their reserves to match more closely the basket of currencies that makes the SDR. With a little reflection however, it should be clear that the move by the IMF is a reminder for companies across the world that the renminbi needs to be part of their business strategy.

The reasoning is as follows: The renminbi's newfound status as a reserve asset is going to, over the medium term, boost demand for the currency among central banks. A recent Bloomberg poll of reserve managers gave a median prediction that 10 per cent of global foreign exchange reserves will be held in the Chinese currency by 2025.