The day for the ascend of Renminbi as a global currency is not far away. The IMF has observed that the Chinese national currency is no longer undervalued. In the past, countries from the West, especially the US, has been blaming that China is artificially keeping its currency undervalued.
IMF’s new stand on the Chinese currency is a marked shift from its traditional one. All through the past, the Fund has not given its ears to China’s currency reform calls to be initiated by the IMF. Many of the Fund’s mentors also accused that Beijing is artificially keeping its currency undervalued to make export gains.
Last week, the US continued its assault on Chinese currency policies blaming that Beijing is keeping its currency undervalued.
The IMF’s different voice made by its mission chief for China and East Asia, Mr Markus Rodlauer is the first positive note from the West, on Renminbi at a time when China is making all possible arrangements to boost its national currency.
Rodlauer has also said that the IMF supports Chinese authorities for Yuan’s (means Renminbi) inclusion in the IMF’s basket of reserve currencies. At present there are four currencies in the IMF basket of currencies to determine the value of SDR- the US Dollar, the Euro, British Pound Sterling and the Japanese Yen.
Yuan is the second most used currency for settling trade transactions.
Economist Eswar Prasad, a former official at the IMF and the writer of the well known book ‘The Dollar Trap’ has also observed that the Fund’s new assertion is an important development for the Chinese currency.