Rout threatens renminbi SDR inclusion

摘要

The expected inclusion of China's renminbi in the International Monetary Fund's Special Drawing Rights basket for global reserve currencies has been thrown into disarray following the rout in Chinese equities that has erased 25% from the Shanghai Composite Index in a matter of weeks. If, as many now expect, the government is forced to intervene in the currency as a defence against the weakening effects of contagion from the stock market rout, it will hand ammunition to those hoping to slow the march of the renminbi towards SDR inclusion. "The probability of yuan [renminbi] inclusion has significantly fallen over the past three weeks since the stock market peaked," said David Woo, head of rates and currencies strategy at Bank of America Merrill Lynch.