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Recently, the International Monetary Fund formally recognized the Chinese renminbi currency (also known as the "yuan") as one of an elite group of international currencies. The group includes the U.S. dollar, the euro, the British pound, and the Japanese yen. This designation is an official vote of confidence from the IMF, saying the renminbi is a reliable, legitimate form of currency that should be accepted everywhere. Experts say this recognition will hopefully lead to a decrease in currency manipulation, which has been a problem in China. Currency manipulation is a term for when once currency is used to buy huge amounts of a foreign currency. It's a way of forcing a currency to stay cheap, while preventing others from becoming competitively cheap. The Economic Policy Institute estimates that China spent the equivalent of half a trillion U.S. dollars purchasing foreign currencies in 2013 alone. It works in China's favor by increasing the total number of exports over the number of imports. This could come to an end, though, now that the Chinese currency is under more international scrutiny and under less control of the Chinese government.
China's Renminbi Is Approved by I.M.F. as a Main World Currency (nytimes.com)
"The Chinese renminbi was anointed as one of the world's elite currencies on Monday, a milestone decision by the International Monetary Fund that underscores the country's rising financial and economic heft."
Maybe China's Currency Isn't Undervalued-Really? (epi.org)
"In a blog post, Martin Kessler and Arvind Subramanian of the Peterson Institute claim that, contrary to popular belief, the Chinese renminbi is not undervalued."
What Is Currency Manipulation? (ourfuture.org)
"Currency manipulation is a big deal. It is costing up to 5.8 million American jobs and costs U.S. GDP by up to $720 billion."