The Position Of RMB In The International Monetary Arena Is Very Competitive.

Whether the renminbi can become one of the major international currencies depends on the actual situation of the use and possession of Renminbi in the international market.

The yuan will officially join the SDR basket of the International Monetary Fund (IMF).

The author believes that RMB's accession to the SDR basket is of great significance. It not only marks the affirmation of the international community's achievements in China's economic development and reform and opening up, but also is an international recognition of the status of the renminbi, which greatly improves the status of RMB in the international monetary Arena, and is an important milestone in the internationalization of RMB.

In November 30, 2015, IMF announced that the renminbi will be included in the basket of SDR currencies and will take effect in October 1, 2016.

The SDR basket of currencies has increased to 5 currencies, including the US dollar, the euro, the renminbi, the Japanese yen and the British pound. The weight of the renminbi is 10.92%, which exceeds the Japanese yen and the pound, ranking third.

In the history of IMF development, the Yuan's accession to SDR has created two records: This is the first time that emerging economies have been included in SDR, and the first time that the yuan has become a Renminbi.

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"After joining the SDR, the renminbi will become one of the official reserve currencies of the IMF, which means a higher expectation and more stringent requirements for the renminbi."

According to Yi Gang, vice president of the people's Bank of China, overall, the market's expectation of RMB will rise. It will be a more stable and widely accepted currency, and people will have more confidence in holding RMB assets.

The central bank data show that in 2015, the total amount of cross-border RMB receipts and payments totaled 12 trillion and 100 billion yuan, an increase of 21.7% over the same period last year, accounting for 28.7% of the total foreign currency cross-border receipts and payments in the same period.

As of December 2015, the renminbi is the world's third largest trading finance currency, the fifth largest payment currency, and the fifth largest foreign exchange, according to SWIFT.

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It is foreseeable that the RMB will be further boosted by the inclusion of RMB in the basket of SDR currencies.

According to Standard Chartered Bank, after the RMB is included in the basket of SDR currencies, the allocation of RMB assets by global investors will increase significantly. By 2020, the total net foreign purchases of Chinese bonds and stocks will reach 5 trillion and 500 billion yuan to 6 trillion and 200 billion yuan.

At the same time, from the inside view, we should give full play to the RMB as an example.

The role of Basket Currencies needs to accelerate the reform of interest rate marketization and exchange rate formation mechanism, improve the breadth and depth of capital markets, and promote the exchange of capital items, thus laying the foundation for the next stage of RMB internationalization. From the outside, we need the RMB to play a greater role in promoting the implementation of the "one belt and one way" strategy and the development of multilateral financial institutions such as Asian investment banks and BRIC banks.

The author believes that RMB's accession to the SDR currency basket has accelerated its internationalization process, but the reform of RMB internationalization is still a long way to go, and the amount of RMB used in international trade needs to be further improved.

As Yi Gang said, "joining the SDR is not a labor and leisure. A currency can be added to SDR when it meets the requirements. When it does not meet the requirements, it can also withdraw from SDR.

Therefore, we must continue to reform and open up, so that the status of RMB as the currency of SDR basket will continue to consolidate. "

The RMB internationalization report issued by the people's Bank of China in August this year also said that although the renminbi was officially recognized as "freely available currency", the "official share" may not naturally generate the "market position" of the international currency.

"Entering the basket" does not mean that the goal of RMB internationalization has been achieved. Its ultimate goal is to get the currency position that matches China's economic and trade status. It is destined to go through a long historical process.