Posted on 02 Dec 2015
The inclusion of China's yuan in the IMF currency basket will benefit Indonesia, a statistics official has said, given that China is one of Indonesia’s biggest trade partners,.
Central Statistics Agency (BPS) deputy head of distribution and statistics Sasmito Hadi Wibowo said the inclusion of the yuan into the IMF basket of currencies meant that the Chinese currency would be widely used in international transactions and widely traded on foreign exchange markets.
This would lead to the strengthening of the yuan, including against the rupiah, he added.
"If the yuan strengthens against the rupiah. China’s products will be sold at higher prices to our country. This will reduce our imports, unless China decides to slash the prices of its products. Thus, the inclusion of yuan into the IMF system will improve our trade balance," Sasmito said in Jakarta on Tuesday.
As the currency of the world second-biggest economy and the biggest global trader, China's yuan ranks fourth among currencies used for global trade. China has encouraged the use of the yuan abroad, especially for trading activities, and expects doing so will help Chinese exporters by eliminating the cost and risk of volatile exchange rates.
Since 2009, China has signed currency-swap agreements with central banks in the UK, Brazil, Canada, Indonesia, South Korea and other countries. Branches of Chinese state-owned banks in Britain, Australia, Germany, Switzerland, Russia, France and Singapore have received authorization to take deposits or settle trade-related transactions in yuan.
On Monday, the IMF added the yuan into its basket of currencies, standing together with other currencies, namely the US dollar, pound sterling, euro and yen, which are used to calculate the value of special drawing rights, a notional currency used as the standard for dealing with member governments.
