Chinese currency renminbi (RMB)'s entry into the Special Drawing Rights (SDR) basket is an important milestone in China's integration into global financial system, chief of the International Monetary Fund (IMF) to Cambodia has said.
The IMF executive board decided Monday to include the RMB to its SDR basket as a fifth currency, along with the U.S. dollar, the euro, the British pound and the Japanese yen, effective from Oct. 1, 2016.
Yong Sarah Zhou, resident representative of the IMF in Cambodia, said the IMF recognized the significant increase in the internationalization of the RMB and China's continuing reform progress to achieve an increasingly open and market-based economy.
"As this integration is sustained and further deepened, it will bring about a more robust international monetary and financial system, which in turn, will support the growth and stability of China and the global economy," a local English newspaper - the Khmer Times Thursday quoted the representative as saying.
"With Cambodia's strong economic ties with China, the RMB's inclusion in the basket will also support the already increasing use and trading of the RMB locally," she said.
Stephen Higgins, managing director of research firm Mekong Strategic Partners said use of the RMB in Cambodia, and in fact globally, is still fairly modest, but the RMB's entry into SDR will boost trade and economic ties between Cambodia and China.
Song Saran, owner of Amru Rice (Cambodia), said use of the RMB would have a huge impact on the export of agricultural products to the Chinese market.
"Currently, we use the U.S. dollar, so it means that Chinese buyers have to exchange their currency to U.S. dollars and transfer this to Cambodia," he was quoted by the newspaper as saying.
He added that his company exported over 7,000 tons of milled rice to China from between March and June, and all payments were made in U.S. dollars.
He said that if the RMB was more widely accepted and trade volumes increased with China, the company would accept payment in RMB.
