China pledges targeted reform to help RMB included in SDR

Chinese Premier Li Keqiang (R) meets with Christine Lagarde, managing director of the International Monetary Fund (IMF), in Beijing, capital of China, March 23, 2015. (Xinhua/Pang Xinglei)

Chinese Premier Li Keqiang on Monday asked the International Monetary Fund (IMF) to include the Chinese currency in the special drawing rights (SDR) basket.

China will speed up the basic convertibility of yuan on the capital account and provide more facility for domestic individual cross-border investment and foreign institutional investment in China's capital market, Li said while meeting IMF Managing Director Christine Lagarde.

He added that China hoped to, through the SDR, play an active role in the international cooperation to maintain financial stability and promote the further opening of China's capital market and financial area.

Lagarde told Li that the IMF attached importance to relations with China and will maintain communication and cooperation with China on the SDR review.

SDRs are international foreign exchange reserve assets. Allocated to nations by the IMF, an SDR represents a claim to foreign currency for which it may be exchanged in times of need.

At the time of the last SDR review in 2010, the RMB met the export criterion, but was assessed as not meeting the "freely usable" criterion. Since then there have been a number of developments in the RMB's international use, and the upcoming review will take stock of these developments, Lagarde said in a previous interview with Xinhua.

Li said China will push forward financial reform for the real economy and prevention of risk. China will develop private, small and medium banks to provide better support for small businesses.

China will also develop multi-level capital market, mobilize social capital, and lower capital leverage for companies to support entrepreneurship and innovation.

Lagarde hailed China's financial reform, saying it will be example for other countries and help global financial stability.

On Monday morning, Chinese Vice Premier Ma Kai also met Lagarde.