RMB Into Basket SDR To See What Impact On Your Wallet.

After several years of preparation, the renminbi in the hands of our people will usher in a historic moment tomorrow.

In November 30th, the Executive Board of the International Monetary Fund (IMF) will vote on the introduction of the renminbi into the special drawing rights (SDR). Prior to this, Lagarde, President of IMF, issued a statement that the renminbi met the requirements of the "freely available" currency.

The industry generally believes that if the result of the vote is not unexpected, the RMB will become the fifth currency after the US dollar, euro, pound and Japanese yen to join the SDR basket.

Then, how will this affect the consumption and investment of ordinary people in China? Will the money be better or shrunk? Experts say that in the long run, people in China will be able to travel, shop and invest directly outside the yuan, reducing exchange costs and avoiding exchange rate risks.

From an international point of view, SDR is essentially the foreign exchange reserve of the Central Bank of the member states. The member states can pform the SDR allocated by the IMF into the needed foreign currency so as to facilitate the settlement of international trade.

Therefore, the SDR basket currency is usually regarded as a safe haven currency. Gaining this status will undoubtedly increase the use of RMB by the public sector and the private sector within the international scope.

With the rising demand for RMB in the international market, the possibility that the RMB exchange rate will remain basically stable or even strong in the future will be relatively large.

As of March 2015, the scale of global foreign exchange reserves was 11 trillion and 430 billion US dollars, and the accession of SDR to RMB would further encourage the global central bank and sovereign wealth funds to hold RMB denominated assets, thereby enhancing the status of RMB as reserve currency.

Although RMB can not change the pattern of international reserves immediately after its accession to the SDR, international institutions will have the will to hold more renminbi assets. In the short term, it will increase the international market's recognition and confidence in RMB and relieve the pressure of RMB depreciation. Especially in the context of strong dollar interest rate expectations, it will help our people to become stronger and reduce their worries about their pocketbooks.

At the investment level, with the opening of capital and financial accounts, maintaining a stable position of the renminbi will help investors in asset allocation and trading in the world.

In the future, Chinese people can more easily allocate overseas assets and invest in real estate, stocks and bonds abroad. It will no longer be a dream to buy a house directly from abroad with RMB. Foreign investors can enjoy more investment channels in domestic stocks, funds, treasury bonds and P2P, and cross border domestic individuals.

Investing in Chinese capital with overseas institutional investors will be more free and convenient.

Since 2014, China has actively promoted the mutual recognition of mutual funds between Shanghai and Hong Kong and Hongkong and the mainland. In the later stage, it will speed up Shenzhen Hong Kong Tong and reform the capital account in Shanghai free trade area.

RMB's accession to the SDR will continue to promote the opening up of the stock market.

In addition, China's accession to the SDR will raise the status of RMB, and the attraction of China's national debt will also be greatly strengthened, and the opening of China's treasury bond market will also be promoted. It is expected that the participation of overseas investors in China's bond market will also increase.

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In view of the expansion of the renminbi valuation function, many commodities will be priced in Renminbi, which will avoid the risk of exchange rate fluctuations and reduce the cost of purchase.

"This is quite cost-effective for traveling abroad and studying abroad."

Lian Ping, chief economist at Bank of communications, said that as the renminbi entered the SDR, more and more countries recognized it.

Money, willing to receive the RMB, or to use the RMB to carry out a wide range of pactions, so that in the future, shopping, tourism and other consumption will be more convenient.

In the major tourist spots around the world, the exchange of RMB and foreign currencies will become more convenient. People do not need to exchange foreign currencies, and they can travel abroad with RMB.

Because of the direct use of RMB settlement, there will be no longer any worries caused by exchange rate changes.