YESTERDAY THE INTERNATIONAL MONETARY FUND (IMF) ANNOUNCED that China's renminbi would become its fifth designated reserve currency, joining the US dollar, EU euro, British pound, and Japanese yen. The move comes in response to a several-year campaign by Beijing to have its currency thus credentialized. For now, central banks around the world hold only about 1% of their reserves in RMB, but Beijing has created an outsized latent reserve currency presence (another 5%) by concluding numerous significant currency swap deals with major trading partners. The latter scheme was apparently enough for the IMF to finally move on China's strong desire.
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