Just minutes ago, Reuters reported that an IMF staff report has concluded that the Chinese yuan is not yet ready for inclusion in the basket of fiat currencies that make up the IMF’s Special Drawing Rights (SDR).
Hmmm. I wonder how that will go over in Beijing?
Submitted by Craig Hemke, TFMetals Report:
It’s important to note, this is NOT a formal decision by the IMF. The formal announcement is still expected sometime later this month. Instead, this is an IMF staff report with the conclusion that though the Chinese have made “progress”, the yuan is still not ready for primetime as a “freely usable currency”. Gosh, I wonder if the Chinese politburo and the 32 countries with which China has direct currency swaps think of that? I also can’t help but wonder why a currency with “usability” issues would play such a major role in important new institutions like the Asia Infrastructure Investment Bank (AIIB) and the New Development Bank (formerly BRICS Development Bank)?
Oh, well. Maybe when China gets around to updating their gold reserves again…perhaps as soon as later this month…they’ll divulge something a little closer to the truth? Maybe, too, they’ll simply turn the tables on the IMF and tell them to go pound sand, instead? We’ll see. All I know is that a lot of supposedly smart people with “insider level” information were convinced that China was only accumulating gold in order to attain this SDR inclusion. With SDR inclusion now looking to be postponed for at least another year, what happens next is anyone’s guess.
IMF review recommends delaying currency basket adoption of yuan
Tue Aug 4, 2015 6:18pm EDT