Chinese Central Bank Vows to Expand Use of IMF Reserve Currencies

The Chinese yuan was included in the IMF’s elite basket of reserve currencies last year.

China’s central bank Governor Zhou Xiaochuan said the government will make efforts to expand the use of the International Monetary Fund’s basket of reserve currencies in its domestic economy.

Mr. Zhou said China will use both the U.S. dollar and the special drawing rights when reporting the country’s reserves of foreign currencies in the near future, according to transcripts of his remarks posted on the central bank’s website Friday.

The government will also consider issuing bonds denominated in SDR in China, he said at a briefing after meeting with officials of the Group of 20 major economies in Paris on Thursday.

The central bank chief said last month that as the host of this year’s G-20, China will push for a gradual increase in world-wide use of the IMF’s SDR as a way to improve management of financial risks.

The IMF decided last year to include the yuan into its elite basket of reserve currencies, a move designed to spur greater liberalization in the world’s second-largest economy. Beijing has considered the move, effective October, a chance to promote the use of its domestic currency in the global economy.

China’s foreign-exchange reserves, the world’s largest, fell by $28.6 billion in February from the previous month, to $3.202 trillion, following a decline of $99.5 billion in January.

China is very clear. World is moving away from the dollar. Gold will return to monetary system but no new gold standard. #huge

— willem middelkoop (@wmiddelkoop) 1 avril 2016

Here is the SDR-statement on the PBoC's website. Only in Chinese. Use Chrome and autotranslate to read content. https://t.co/q7NwEocrZF

— willem middelkoop (@wmiddelkoop) April 1, 2016