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Society, Law & Government 2026-09-09 00:00 UTC edition Story 12 of 24 Gate: passed

Renminbi Global Reserve Share Remains Low Ten Years After SDR Inclusion

The renminbi accounts for only 2 percent of global foreign-exchange reserves as of July 2026, despite its inclusion in the IMF special drawing rights basket.

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The SDR Legacy and Domestic Controls

The IMF included China's renminbi in its special drawing rights basket in 2016, a decision based on a narrow technical judgment of whether the currency could meet balance of payments needs. Ten years later, Beijing is using currency restrictions to keep domestic resources captive for investment in advanced technology.[1][2][3]

The currency remains a minor player in global reserves. As of July 2026, the renminbi represented only 2 percent of all global foreign-exchange reserves. This low share persists even though the currency has gained ground in China's own bilateral trade. In 2024, the renminbi accounted for 27 percent of China's trade in goods and 32 percent of trade in services.[4][5]

Rather than opening its markets, China is building a parallel financial architecture. Analyst Alicia Garcia Herrero argues that China is constructing an alternative monetary system for the renminbi's cross-border use, noting that "what China is pursuing looks less like the internationalization of a currency" than a way to bypass traditional systems. This strategy has unfolded alongside historical valuation gaps; the IMF previously estimated that the renminbi was undervalued by between 17.3 percent and 25.3 percent.[6][7]

The next major policy test will arrive when the IMF reviews its SDR currency weightings, which it is expected to complete by July 2027.[8]

Key takeaways

  • The IMF's 2016 inclusion of the renminbi was based on a narrow technical definition of 'freely usable' rather than a broad endorsement of Chinese financial openness. 1 source
  • China's renminbi accounts for only 2% of global foreign-exchange reserves, trailing even the Canadian dollar, which is not in the SDR basket. 1 source
  • Beijing is leveraging its currency controls to create an alternative monetary system, potentially establishing a new chokepoint for global financial distress. 1 source
  • The IMF is urged to use the 2027 SDR basket review to demand concrete capital account reforms from China. 1 source
  • Monitor the IMF's July 2027 SDR basket review for potential new requirements regarding capital account openness. 1 source
  • Assess exposure to renminbi-denominated assets in light of China's ongoing use of the currency to circumvent dollar-based sanctions. 1 source

Notable quotes

“what China is pursuing looks less like the internationalization of a currency”
— Alicia Garcia Herrero

What’s unresolved

  • Whether the IMF will adopt stricter 'freely usable' criteria in the 2027 review.
  • The extent to which China will use its currency as a leverage point in future financial crises.

Citations

  1. [1] The IMF's boost to China's currency is costing the world, ten years later The IMF included China's renminbi in the basket of currencies underlying its special drawing rights (SDRs) in 2016. Manifest ID 1788893071819938274 - Atlantic Council - Official Analysis - interrogate via MCP
  2. [2] The IMF's boost to China's currency is costing the world, ten years later The IMF's 2016 decision to include the renminbi was based on a narrow technical judgment of whether the currency could be used to meet balance of payments needs. Manifest ID 1788893071819938274 - Atlantic Council - Official Analysis - interrogate via MCP
  3. [3] The IMF's boost to China's currency is costing the world, ten years later Beijing is using currency restrictions to keep domestic resources captive for investment in advanced technology. Manifest ID 1788893071819938274 - Atlantic Council - Official Analysis - interrogate via MCP
  4. [4] The IMF's boost to China's currency is costing the world, ten years later As of July 2026, the renminbi represented only 2 percent of all global foreign-exchange reserves. Manifest ID 1788893071819938274 - Atlantic Council - Official Analysis - interrogate via MCP
  5. [5] The IMF's boost to China's currency is costing the world, ten years later In 2024, the renminbi accounted for 27 percent of China's trade in goods and 32 percent of trade in services. Manifest ID 1788893071819938274 - Atlantic Council - Official Analysis - interrogate via MCP
  6. [6] The IMF's boost to China's currency is costing the world, ten years later Alicia Garcia Herrero argues that China is constructing an alternative monetary system for the renminbi's cross-border use. Manifest ID 1788893071819938274 - Atlantic Council - Official Analysis - interrogate via MCP
  7. [7] The IMF's boost to China's currency is costing the world, ten years later The IMF estimated that the renminbi was undervalued by between 17.3 percent and 25.3 percent. Manifest ID 1788893071819938274 - Atlantic Council - Official Analysis - interrogate via MCP
  8. [8] The IMF's boost to China's currency is costing the world, ten years later The IMF is expected to complete its next review of SDR currency weightings by July 2027. Manifest ID 1788893071819938274 - Atlantic Council - Official Analysis - interrogate via MCP