Adding the yuan as a reserve currency will allow central banks to buy more of the Chinese currency, and boost investment in the Chinese stock market. According to Standard Chartered bank, within five years market players will invest at least $1 trillion in Chinese assets.
The historic decision will come after years of negotiations between Beijing and the IMF. The main obstacle was China’s monetary policy of keeping the yuan artificially low to boost domestic exports.
The list of currencies in the basket hasn’t been updated by the IMF since 2000, when the euro superseded the franc and deutschmark.