China hopes RMB included in SDR basket in 'near future'

A senior Chinese central bank official said Thursday that the country is "actively communicating" with the International Monetary Fund (IMF) on the possibility of including Chinese currency yuan, or RMB, in the basket of the Special Drawing Rights (SDRs).

"We hope the IMF can fully take into account the progress of RMB internationalization, to include RMB into the basket underlining the SDR in foreseeable, near future," said Yi Gang, vice governor of the People's Bank of China.[Special coverage]

However, China will be patient until conditions are ripe, Yi said at a press conference on the sidelines of the ongoing annual parliamentary session.

SDRs are international foreign exchange reserve assets. Allocated to nations by the IMF, an SDR represents a claim to foreign currencies for which it may be exchanged in times of need.

Although denominated in U.S. dollars, the nominal value of an SDR is derived from a basket of currencies, with, specifically, a fixed amount of Japanese yen, U.S. dollars, British pounds and euros, without RMB.

The IMF reviews the currencies in the SDR basket every five years, with the next review to be conducted in 2015.

To become a currency included in the SDR basket, the trade volume of goods and services behind that currency will be evaluated, Yi explained, stressing that RMB has no problem in this regard. But he said views are divided on whether the RMB is a freely usable currency.

"No matter whether and when the RMB will be included in the SDR basket, China will push on with its financial sector reform and opening-up," Yi said.

The yuan became the world's No. 2 currency for trade finance globally in 2013, and overtook the Canadian and Australian dollars to enter the top five world payment currencies in 2014, according to global transaction services organization SWIFT. China said the yuan has also been used as a reserve currency in some countries and regions.