Milestone: RMB officially incorporated into SDR

RMB no suspense successfully incorporated into the SDR currency basket.
Eastern time November 30th (Beijing time December 1st), the International Monetary Fund [microblogging] (IMF[microblogging]) announced that, after the vote, the RMB meets the standard, IMF will be incorporated into the special drawing rights (SDR) currency basket. The new currency basket will come into effect on October 1, 2016.
As the largest developing country, the renminbi became the first emerging market countries to be included in the SDR. Following the dollar, euro, pound, yen, fifth members of the IMF basket currency. IMF said that the RMB will occupy 10.92% of the SDR currency basket, while the other four countries, the proportion of the currency were: U.S. dollar 41.73%, euro 30.93%. The yen and the pound will account for 8.33% and 8.09% respectively.
Analysts pointed out that the inclusion of the yuan into the SDR currency basket, which means China's integration into the global financial market, for China and the international monetary system is a good thing.
IMF Managing Director Christine Lagarde [microblogging] said: "directors will be about the renminbi to be included in the SDR basket of currencies, China's economy is integrated into the global financial system is an important milestone. It is a recognition of the Chinese authorities in the past many years in the reform of its monetary and financial system. China's continued advance and deepening in this area will promote the establishment of a more vibrant international monetary and financial system. This will support the development and stability of China and the global economy."
Of course, in this important historical moment, in addition to the joy, the market is more concerned about the people into the SDR after the exchange rate will be how to go? What kind of connection will be produced with the people?
RMB will not be a substantial depreciation
In any case, the exchange rate of the RMB market is generally concerned about the problem. Some analysts have pointed out that after joining the SDR, coupled with the Fed's interest rate hike is expected to heat up, the RMB will face devaluation pressure.
Expectations of devaluation of the market, the morning of December 1st, the people's Bank of China [microblogging] held on the yuan into the SDR hair dryer, the central bank [microblogging] vice governor Yi Gang said, do not have to be incorporated into the SDR and worried about the devaluation of the rmb.
Yi Gang pointed out that the IMF review report will soon be released, and the IMF's assessment of the RMB has not involved in the valuation of the rmb. China's economy maintained at a high level of growth, the growth trend has not changed. There is a large surplus of goods trade, foreign exchange reserves are also very abundant, so will not depreciate. Will also maintain a managed exchange rate regime, after joining the SDR, the basic exchange rate regime will not change, the market will continue to promote reform.
Although market expectations for a Fed rate hike in December heating, but most agencies predicted to weaken the renminbi in the short term, but it does not appear severe devaluation pressure. At the same time, analysts pointed out that the current market has digested the news of the yuan into the basket, the news will not cause a lot of stimulus to the market.
"Ultra expected has been difficult." Minsheng Securities Research Institute of macroeconomic researcher Zhang Yu of the domestic news "reporter said that SDR after landing, market sentiment more Fed rate hike around, December is expected to increase interest rates continued to heat up, is expected to hike boots before dropping to the ground pressure of RMB, after superposition SDR dimensional stability will decline, RMB in the short term or present trend of weaker fluctuations, but does not appear to a sharp depreciation of the. "After all SDR need is stable and firm, not be subject to changing moods of rmb."
In Zhang Yu's view, the continued depreciation of the RMB is not realistic. She believes that in 2016 or the reproduction of a one-time calibration devaluation, after more likely to be a stable range of fluctuations in the state.

For the long-term trend of the RMB exchange rate, Zhang Yu pointed out that in the long term, on the one hand, SDR is a credit endorsement, with the gradual advance of the RMB settlement and reserve demand will steadily increase, while China's absolute growth rate is still at the forefront of the world, the continued depreciation of the RMB, on the other hand, with the trade balance under the current account deficit is not sustainable, capital account deficit expanded, the population aging under the interest rate downward, and the weakening of the past, the unilateral continued appreciation of the RMB is also true. "Integrated view, the dollar interest rate hike and the global geopolitical upgrade under the catalysis of the RMB next year or the reproduction of a one-time devaluation calibration, after showing a relatively stable range of fluctuations in the state."
"Into the basket" is a win-win situation
The central bank official said that the yuan to join SDR to help enhance the representation and appeal of SDR, improve the current international monetary system, China and the world is a win-win outcome.
Previously interviewed by reporters, analysts have expressed the same view. , the people's livelihood securities analyst Li Qilin previously accepted by the China News reporter, said, for China, the yuan to join SDR means that the Yuan's free use and reserve security recognition, but also in recent years, the international community to promote the RMB internationalization of the RMB in the international arena status, on the other hand, SDR is part of the current international economic rules, SDR means that China's acceptance and recognition of international rules, will be a major interest related parties to actively participate in international economic activities.
Prior to the "Chinese domestic news" in the "SDR" is a win-win situation, a text also elaborated, the yuan to join the SDR to improve the role of the international monetary system.
In addition, it is worth paying special attention to, after joining the SDR will significantly good domestic bond market. Some analysis, pointed out that after the entry into the basket of international investors accounted for more than an upgrade, China's bond market will have a greater market capacity.
Li Qilin, a research on the bond market has also admitted to reporters, in the RMB to join SDR and to meet the "free use" standard and a series of reforms will be the bond market to bring the market to participate in the main body and the allocation of funds, to promote China's bond market open and mature. While foreign companies will enhance the overall market interest rate sensitivity, and the gradual release of the Panda Bonds issued limit will increase the supply of bonds, bond varieties, improve the pricing mechanism, the term spread in the bond pricing mechanism will be strengthened.
Undoubtedly, after joining the SDR, the RMB will become a safe haven asset, the proportion of foreign exchange reserves in the country, the proportion of RMB denominated bonds will also rise, the RMB in the international financial system will be an important part of.
In fact, from the perspective of the internationalization of the RMB, the RMB into the SDR basket, the market's recognition of the RMB continues to improve, which will help promote the internationalization of the RMB, but also a very important part of the process of internationalization of the rmb.
Of course, from the 3 levels of the internationalization of the RMB, that is recognized, there is a need and can be obtained. Was recognized only the first step in the internationalization of the RMB, the international road is still a long way to go. Zhang Yu told reporters that the current point of view, the yuan to join SDR has just been approved, of course, all levels are actively and orderly way, we are running on the right path, the future must be bright, but it is not necessarily the way to get the foot of the road, still need to be careful.
RMB has been incorporated into the SDR, the market also believes that the future of domestic financial reform will continue to be deepened, while the international monetary system will be improved, and thus maintain the stability of the global financial.
People will benefit
For the people, the same can also benefit from the addition of SDR.
Yi Gang said that after joining the SDR, the global market for the image of the RMB and the expected increase, the RMB will be a more stable currency. The central bank will be more comprehensive assessment of the renminbi, but also makes the currency more robust, more credit in the world. Reduce the pressure on the purse.

In this regard, Li Qilin also pointed out that after the addition of SDR, commodities can be used in RMB, the exchange rate risk will fall. Investors can more easily configure overseas assets. Similarly, foreign investors can also enjoy the domestic stock, funds, bonds, P2P and other more channels of investment and financing for the domestic individual cross-border investment and foreign institutional investors to invest in Chinese capital to provide free and convenient.
Can be seen, after the inclusion of SDR, the use of RMB denominated in the import and export commodities, will reduce the risk of exchange rate and exchange costs, companies will directly benefit from. At the same time, people in study abroad, travel, shopping, even personal overseas investment will benefit, which may be the direct use of the renminbi as the settlement currency, replacing the swap process.
However, Yi Gang also believes that the impact of the yuan to join the SDR after the people (72.70, 0.14, 0.19%), from the short-term and long-term perspective. In the short term, these effects can not be a look, but the future will become more embodied in the SDR of the yuan into a far-reaching significance, to bring benefits to the people.
In addition, Yi Gang also reminded, in addition to the Chinese people, in fact, the inclusion of SDR, the people of the world are good. "For example, the surrounding countries in Southeast Asia," along the way along the country, in fact, will give the people there, the masses, the people bring benefits and benefits, because the use of more convenient, more stable, because whether trade or investment, will bring a lot of economic benefits."