The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

China: The march of the yuan

China signals its intent for the yuan to become a reserve currency soon.

Is China paving the way for the yuan to become the world’s next reserve currency? At the beginning of this month its central bank announced that it was for the first time using its own currency rather than dollars to buy IMF bonds. China agreed to buy $50 billion-equivalent of the Fund’s special drawing rights as part of the official sector’s fight against the international financial crisis. China’s loan is part of a $500 billion emergency pool of funds the IMF is making available to troubled countries through the issuance of SDRs, a currency basket comprising dollars, euros, yen and sterling.

China’s purchase could be interpreted as an accounting move in that the IMF could sell the yuan back to China for dollars, allowing the central bank to diversify its reserves. More likely, however, it is part of a ploy by the Chinese authorities for the yuan to gradually challenge the dollar’s authority as the world’s main reserve currency.

One reason why the Chinese paid for the SDRs in its own currency could be for the Fund to lend the yuan to a creditor nation, which could then use the money to buy goods from China, thereby promoting the use of the yuan for trade and settlement purposes.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree