Reserve currency status to open renminbi gates

Following the earlier announcement in November that the renminbi (RMB) meets the International Monetary Fund's (IMF's) criteria as a "freely usable" currency, the IMF Executive Board is expected to have decided on Nov 30 to include the RMB in its Special Drawing Rights (SDR) basket of currencies from Oct 1 next year.

This came as no surprise to those who have followed China's unprecedented steps to open up its capital markets.

A monumental milestone for the RMB, this event will trigger significant and gradual inflows of funds into RMB - changing the global currency landscape forever, as central banks, sovereign wealth funds (SWFs) and multilateral institutions recalibrate their balance sheets.