It Is Inevitable For The Renminbi To Enter The Basket.

China has already met the terms set by the IMF (the International Monetary Fund) to grant Renminbi reserve currency, and many banks predict that the renminbi will be successfully incorporated into the basket of special drawing rights (SDR) currencies this month.

In a October 29th report, Goldman Sachs pointed out that RMB You can join IMF's SDRs right now, and this is the most likely scenario. Morgan, chief China economist at JP Morgan, said any additional clauses could only be due to technical problems. The central bank and the sovereign wealth fund manager of Singapore Branch of Standard Chartered Bank and Hai Bin, a former adviser to the International Monetary Fund, said the agency would seek to avoid conditional approval.

Relevant analysts said: This is basically a foregone conclusion unless there are very surprising and unexpected things happen.

After thirty years of rapid growth of IMF club membership, IMF will reach its peak once China joins the world's second largest economy.

The following is a report issued by the International Monetary Fund staff in August 3rd, asking China how to do it and how the country has performed so far.

* IMF There should be hedging tools, such as long term cross currency swap, or short-term hedging of acceptable costs, to reduce foreign exchange and interest rate risks for the central bank.

* corrective actions: the people's Bank of China said in July that foreign central banks, sovereign wealth funds and global financial institutions in China's domestic market would no longer need pre approval trading bonds or domestic markets. interest rate Swap or buy back agreement. In a November 6th statement, the people's Bank of China said that China would allow foreign central banks to trade all domestic currency products, including spot, forward, swap and options.

* the International Monetary Fund: the RMB fixed exchange rate of the people's Bank of China is not based on market fluctuations, and the price difference between domestic and foreign market exchange rates means that offshore exchange rate can not perfectly hedge risks for the domestic market.

* corrective measures: the people's Bank of China thoroughly inspected its reference exchange rate mechanism in August 11th, and demanded that the market institutions that submit the exchange rate guidance price must consider the closing price of the previous trading day, the supply and demand of foreign exchange spanactions, and the exchange rate changes of other major currencies. The Central Bank of China has also adopted a rare intervention in the offshore renminbi market, narrowing its gap with the offshore renminbi market to 0.4%, compared with 2% in August 20th.

Irene Cheung, a currency strategist at the ANZ bank in Singapore, said that China hoped that the exchange rate decision mechanism would be revised to close the offshore and offshore prices and pave the way for joining SDR. If the exchange rate is significantly different between offshore and domestic prices, it may lead to chaotic and complex interest rates on special drawing rights.