The ‘magazine cover’ decision4 min read 03 Oct 2016, 10:57 PM IST
The IMF announcement of including the yuan as a reserve currency is likely signalling a turn for the worse in the Chinese currency
Amid much fanfare and “thumbs up" signs, the International Monetary Fund (IMF) has announced the inclusion of the Chinese yuan as a reserve currency. According to the Fund, the decision acknowledged the progress made in liberalizing and improving the infrastructure of China’s financial markets. It carries nearly 11% weight in the Special Drawing Rights basket of currencies. The IMF executive board took this decision in November 2015 and it was meant to become effective on 1 October 2016. The decision carries with it the potential to be the “curse of the magazine cover" on the Chinese currency and even the economy.
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