IMF's Executive Board Gives China More Time For Yuan To Become Reserve Currency

The International Monetary Fund on Wednesday announced that it has extended its current Special Drawing Rights basket of currencies for nine months, effectively giving China more time to comply with conditions needed to join an elite club of reserve currencies along with the U.S. dollar, euro, yen and British pound. China has been pushing to join the SDR basket and the IMF staff recently recommended the delay, saying more work was needed before China could join. The IMF decision puts off any changes to the basket until October 2016. The IMF has already said China's recent move to allow the yuan's value to be influenced by the market was one step on the road to becoming a reserve currency. The yuan depreciated when the People's Bank of China announced the move earlier this month, leading to criticism that it was engaging in a currency war. The IMF board said it will still discuss the composition of its SDR basket later this year.