Biggest Yuan Reforms in a Decade Did Little for China's IMF Push
- Exchange rate isn't more market-driven now, says Greenwood
- Yuan's chances of reserve status receding, says Bocom
China’s biggest exchange-rate reforms in a decade have had little impact on the yuan’s chances of winning reserve status at the International Monetary Fund, with questions still being asked about the extent to which the currency has been freed.
The People’s Bank of China surprised investors in August with a devaluation and a shift to a more market-oriented yuan reference rate, moves that triggered the steepest depreciation in two decades. Policy makers responded with record intervention, curbs on forwards trading and increased scrutiny of outflows. John Greenwood, chief economist at Invesco Asset Management and architect of Hong Kong’s currency peg to the greenback, says the yuan’s chances of being selected this year to join the dollar, euro, pound and yen in the IMF’s Special Drawing Rights are at best 45 percent.