When a member country has a balance of payments deficit, it can exchange foreign exchange with other member countries designated by the IMF to pay the balance of payments deficit or repay IMF loans, and it can also act as an international reserve like gold and freely convertible currencies. Because it is a supplement to the original ordinary drawing rights of the International Monetary Fund, it is called special drawing rights.
Significance of RMB joining SDR;
1. The adoption of this resolution is another historic event in China, which will have an important impact on China's financial reform and the trend of RMB exchange rate. At the same time, the RMB will become the fifth SDR basket currency alongside the US dollar, euro, pound and yen.
2. For China, RMB's entry into SDR is not only the IMF's recognition of RMB's internationalization process, but also China's commitment to continue to promote the gold reform, including the opening of capital account.
3. RMB joining SDR will promote the opening of capital account.
4. The inclusion of RMB in SDR will be interpreted as the IMF's official recognition of RMB as a freely usable currency, which also marks the international recognition of China's increasingly prominent importance in the international financial market, which will further promote China's domestic financial reform and capital account opening process. ?
Extended data:
The Risk of RMB Joining SDR Currency Basket
1. From the perspective of interest rate,
The inclusion of RMB in SDR currency basket requires RMB interest rate to be more market-oriented, which also means that the government's interest rate regulation space may be narrowed in the future.
If inflationary pressure rises in the future, the tightening of monetary policy may cause major financial institutions such as commercial banks to raise interest rates and compete for funds, which may increase the debt cost of commercial banks and make them face operational difficulties. It is not excluded that some small commercial banks face the risk of unsustainable operation.
2. From the perspective of exchange rate
After the RMB is included in the SDR currency basket, it may continue to force its market-oriented reform to be further accelerated, but it remains to be seen whether the RMB exchange rate is close to the equilibrium level. If it is necessary to further promote the market-oriented reform of the RMB exchange rate in the future to maintain its competitiveness in the SDR currency basket, then there may be uncertainties in the RMB exchange rate.
3. From the perspective of systemic risk
It may lead to a larger cross-border flow of capital, and then increase systemic risks by affecting the stock market and the property market. If the domestic and international environment fluctuates greatly in the future, the funds in the stock market or real estate market may accelerate the cross-border flow, which will have a negative impact on the financial market and macro-economy.
Baidu encyclopedia-special drawing rights
Baidu encyclopedia-RMB joins SDR
People's Network-Positive Significance and Potential Challenges of RMB Joining SDR