U.S. Takes Step Toward Support for China's Reserve-Currency Bid
- Meeting IMF criteria would result in U.S. backing yuan in SDR
- U.S. previously insisted China implement financial reforms
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The Obama administration took a step toward backing China’s bid to have the yuan recognized as a global reserve currency, as the U.S. softened its insistence that the Chinese implement financial reforms to win support.
The International Monetary Fund is reviewing whether the yuan should be included in its Special Drawing Rights, a basket of reserve currencies used by the lender as a unit of account. After U.S. President Barack Obama and Chinese President Xi Jinping met Friday in Washington, the two sides issued a statement saying the U.S. supports the inclusion of the yuan “provided the currency meets the IMF’s existing criteria in its SDR review,” a point Xi highlighted in his press conference with Obama.