CEPII, Recherche et Expertise sur l'economie mondiale
Can the Renminbi Make the SDR More Attractive?

Agnès Bénassy-Quéré
Damien Capelle

As part of discussions on reforming the international monetary system, there has been renewed interest in the Special Drawing Right (SDR). In April 2011, the finance ministers and central bankers of the G20 decided to work on a “criteria-based path to broaden the composition of the SDR”.1 In practice, this would lead to the inclusion of the Chinese currency in the SDR, alongside the dollar, the euro, the yen and the British pound. This project is motivated by two main objectives: first, to make the SDR more attractive as a store of value and unit of account; second, to strengthen international monetary cooperation. The main obstacle is that the Chinese currency is not "freely usable", in the terminology of the International Monetary Fund. Given the ongoing process of internationalization of the currency and flexibilization of the exchange-rate regime, relatively rapid inclusion of the renminbi in the SDR could bring substantial benefits in terms of representativeness, efficiency and stability.

 Keywords : SDR | IMF | CHINA | renminbi

 JEL : F31, F33

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La Lettre du CEPII
N° 314   September 2011

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