Chinese Yuan to Become Major World Currency In 2016

January 28, 2016

Unlocking Word Meanings

Read the following words/expressions found in today’s article. 

1. key / ki / (adj.) – very important
Example: The organization plays a key role in giving assistance to poor countries.

2. reserve / rɪˈzɜrv / (n.) – a stock of things stored for later use
Example: Countries can use their monetary reserves to pay their international debts.

3. asset / ˈæs ɛt / (n.) – property or resources
Example: The central bank holds the country’s gold assets.

4. composition / ˌkɒm pəˈzɪʃ ən / (n.) – the way something is formed
Example: Senior citizens make up a big percentage of the country’s population composition.

5. milestone / ˈmaɪlˌstoʊn / (n.) – an event that marks an important point in the progress of something
Example: Opening international trade is one of the country’s biggest economic milestones.


Read the text below.
The Chinese Yuan will be one of the key international currencies in 2016, the International Monetary Fund (IMF) announced.

The announcement was held in a news conference in Washington last year. During the conference, IMF Managing Director Christine Lagarde [la-GARD] said that the Chinese Yuan, usually referred to as the renminbi (RMB), will officially become the fifth currency to be included in the IMF’s reserve of currencies known as the Special Drawing Rights (SDR) basket.

The IMF uses the SDR in its transactions with its 188 member countries. SDRs are also allocated to the member countries as additional assets.

Currently, the IMF bases the SDR’s value on four major currencies, namely the US dollar, euro, Japanese yen, and British pound. Every five years, the organization’s Executive Board reviews the SDR’s composition. After its latest review on November 30, 2015, the IMF decided to include the renminbi in the SDR basket effective October 1 this year. According to the Board, the renminbi was included in the basket because China met the organization’s existing criteria – a high volume of exports in the last five years, and a freely usable currency.

According to Lagarde, the IMF’s decision to include the renminbi in its reserve of major world currencies is an important milestone in China’s global influence. The IMF chief also mentioned that the move reflects the Asian giant’s improvement in its financial policies in the past years and the years to come.

Viewpoint Discussion

Enjoy a discussion with your tutor.  

Discussion A

·         What is your reaction towards IMF’s decision to make renminbi a major world currency?
·         What do you think would happen if organizations providing assistance to several countries like the IMF did not exist?

Discussion B

·         What is the importance of economic collaboration among countries?
·         Do you agree with the idea of having only one worldwide currency? Why or why not?

January 28, 2016