IMF Adds China's Yuan to Its Basket of Leading Currencies
The International Monetary Fund added China's yuan to its basket of key global currencies on Monday, a move that gives new status to the world's second leading economy.
The IMF said that the Yuan, also known as the Renminbi, "met all existing criteria," to be added to the U.S. dollar, Europe's euro, the Japanese Yen and the British Pound as one of the currencies in the world organization's Special Drawing Rights grouping, the financial standard it uses in issuing crisis loans to its 188 member nations. The action takes effect next October.
IMF Managing Director Christine Lagarde said the decision is "an important milestone in the integration of the Chinese economy into the global financial system."
"It is also a recognition," she said, "of the progress that the Chinese authorities have made in the past years in reforming China's monetary and financial systems."
The Special Drawing Rights are not a freely traded currency, but are important as an international reserve asset. Analysts say the IMF action could push Beijing to live up to its promises to make the Yuan even more "freely usable" across the world, a standard the IMF concluded Beijing has already met.
The yuan will have a 10.92 percent weighting in the IMF's currency basket, a measure that determines which currencies countries can receive when they secure IMF loans. When the yuan is added to the basket of currencies, the dollar will retain its share of about 42 percent, with reduced shares for the euro, British sterling and the Japanese yen.
The addition of the Yuan to the IMF basket could give it new respect in world financial markets, possibly fueling demand for the currency and for Yuan-dominated assets.
US Adds New Anti-Terror Screening for Travelers Headed to US
The United States tightened its visa waiver program Monday in the wake of the Paris terrorist attacks, adding new screening for travelers headed to the U.S. from 38 countries around the world who now are allowed to enter the country without a visa.
The White House said the country's homeland security agency is immediately altering its electronic visa-free clearance system to capture information on whether U.S.-bound travelers have made any trips to countries the United States considers to be a "terrorist safe haven."
In addition, Washington said it is considering pilot programs to add the use of biometric screening for travelers, such as taking their fingerprints or photographs, to the monitoring process before passengers are allowed to board flights headed to the United States.
Each year, 20 million foreign visitors head to the U.S. from the 38 countries the U.S. has partnered with in the visa-free program. The White House said authorities have repeatedly increased their scrutiny of U.S.-bound travelers in recent years and are tightening them even more "given the terrorist attacks in Paris and the ongoing threat posed by foreign terrorist fighters."
The White House said it is seeking quick congressional approval for some of the new security measures, including an increase in fines, from $5,000 to $50,000, against airlines that fail to verify a traveler's passport data. The U.S. is also looking to increase information sharing about possible terrorists among the 38 countries and the international police agency Interpol, and to better track lost and stolen travel documents.