China will find that wooing the IMF was the easy bit

From next October, the yuan will be one of five currencies that IMF members can request in return for their holdings of Special Drawing Rights, a kind of quasi-money used by the fund. China’s gain is at the expense of the euro zone and Britain. Their stake in the SDR basket will fall from a combined 49 per cent to 39 per cent. That said, Beijing’s gain is not really much of one. There are only $285 billion worth of SDRs around, suggesting that China’s 10.9 per cent participation will equate to just $31 billion.
The imprimatur of a multilateral lender won’t be enough to persuade investors to hold more renminbi. After all, Beijing clumsily devalued its currency by 1.9 per cent in a single day in August. And outflows in the third quarter shaved around $180 billion from China’s foreign exchange reserves. The market for offshore yuan-denominated bonds gives a guide to investor appetite: issuance in the past three months totalled 48 billion yuan ($7.5 billion), less than half the paper sold in the prior three months.
That may be just fine for the monetary planners in Beijing. Inflows tend to push up a currency, which in turn puts pressure on exporters, other things being equal, and that might not suit them. What matters more, at least for now, is that the IMF has given China a stamp of approval that would have been difficult to imagine just 10 years ago. Not only is the yuan in the global currency club, it has been deemed “freely usable”. That is reward in itself. Turning the renminbi into a real global reserve currency can come later.