RMB Will Soon Become An Internationally Recognized Top Currency.

As an international means of payment and reserves, the renminbi has been accepted by the whole world, and its attractiveness will surely rise, which will help to reduce the pressure of RMB depreciation.

Today, the International Monetary Fund has approved the special drawing rights to be directly exchanged for RMB. Now it has become the second largest trading financing currency, fourth largest payment currencies, sixth foreign exchange trading currencies, international interbank loan currencies and the seventh largest international reserve currency. It will make rapid progress, and the issuance of Renminbi denominated bonds will also become commonplace.

For the pattern of world power, the eastern civilization of the Chinese representative will return to the center of the world stage, and the global geo economic map and even the world history process will surely take on a new look.

On Tuesday, December 1, 2015, Eastern time of November 30th, Monday, the haze of Beijing was so heavy that it was so suffocating that the school burst out laughing.

Nevertheless, this is a day that will surely be recorded in the annals of history.

On this day, the Executive Board of the International Monetary Fund (IMF) made a formal decision: China's RMB has become the statutory international reserve currency. Since October 1, 2016, it has become the fifth currency of the International Monetary Fund basket with the US dollar, euro, pound sterling and Japanese yen.

This means that for China,

The renminbi will soon become an internationally recognized top currency.

For the existing international mechanism, China has made the most valuable and breathtaking decisive voice in all international organizations that want to join and join.

For the pattern of world power, the eastern civilization of the Chinese representative will return to the center of the world stage, and the global geo economic map and even the world history process will surely take on a new look.

As time goes on, people may only remember October 1, 2016, which coincides with the 67th anniversary anniversary of the founding of the People's Republic of China.

However, historians of later generations will never forget November 30, 2015, because on this day, in the course of China's coming to the world's great power in twenty-first Century, the International Monetary Fund held a coronation ceremony for China in the last threshold of this process, and according to the usual practice, the date of the occurrence of major events is the historical anniversary.

Special drawing rights, its distribution and currency basket

The basket of currencies, that is, SDR basket (Special Drawing Rights basket) or IMF Reserve Basket (International Monetary Fund Reserve basket), is called IMFs Special Drawing Rights (SDR) currency or Rights, and the "International Monetary Fund Special Drawing Rights (currency) basket".

It can be seen that the key to understanding the basket of Renminbi is the special drawing right, namely SDR.

What is SDR?

It is a reserve asset and account unit created by the International Monetary Fund. It is not a real currency. When it is used, it must be pferred through the International Monetary Fund and replaced with other currencies. It can not be used directly for trade or non trade settlement.

Because it is a supplement to the general drawing right at the beginning of the International Monetary Fund, it is called the special drawing right.

It has 3 uses: first, as the reserve assets of our country, we have to pay the bill when the balance of payments deficit occurs; the two is to repay the loans, interest and payment expenses of the International Monetary Fund; and the three is the financial business among the participating countries, providing and repaying loans, loan guarantees, forward pactions and gifts.

Generally speaking, SDR has 4 characteristics: first, SDR is essentially a supplementary international reserve instrument created by the fund to compensate for the lack of international reserves. The basic role of SDRs is to serve as an international payment instrument and monetary unit between Member States and funds, and it can also be converted into freely available foreign exchange among Member States.

Secondly, as a kind of international reserve assets, SDRs are issued by the fund according to the need of international solvency and are collectively supervised and managed by the member states of the fund.

Moreover, under the account of the SDR, the participating countries (the member countries participating in the SDRs) have the right to withdraw their own reserve assets without any other conditions, and withdrawals do not have to be repaid and interest income can be obtained.

The calculation method of the SDR interest rate is roughly based on the weighted average calculation of the short-term interest rates in the 4 financial markets of the United States, Germany, Japan and Britain, and is adjusted quarterly.

Finally, in order to maintain the special drawing rights as a fairly stable benchmark for international reserve assets and monetary value setting units, the fund is in accordance with the "

The authorization of the fifteenth clause and the second paragraph can change the valuation method and principle of the special drawing right at any time.

Popularly speaking, SDR is a kind of book assets, that is, the right of the IMF to allocate funds to Member States.

Although it can not be treated as a tangible asset, it can be used to pay debts, to be used as a certificate of obligation, to act as an international gift or to convert into any other currency in circulation.

Therefore, it is a financial symbol of international identity and world status.