Why did China join the SDR currency basket?
Joining SDR currency basket plays an important role in RMB internationalization. In recent years, China has continuously promoted the internationalization of RMB. Joining SDR will help RMB achieve breakthroughs in multilateral use, international investment and financing, cross-border asset allocation and international monetary system. After the internationalization of RMB, it can reduce the risk of foreign exchange fluctuation and play an important role in China's foreign trade industry and foreign investment.
From an unfavorable point of view, RMB's entry into SDR will promote the opening of China's capital account to a certain extent, the effect of China's regulation of RMB exchange rate will also decline, and the influence of countries around the world on the right to speak RMB will gradually increase, which may affect domestic economic and financial stability.
Generally speaking, for China, an economy with a large proportion of foreign trade, if SDR is included, the advantages outweigh the disadvantages.