Support builds for crucial renminbi move

Central banks in Asia and South America, and many in Africa, have been investing in RMB for a while, but the recent news that European central banks, including the Bank of England, Banque de France, National Bank of Hungary and Swiss National Bank, are following suit shows how rapidly attitudes to the RMB are changing.

Even the European Central Bank is now considering adding the RMB to its reserves, according to media reports. This - along with the rapid growth in the use of RMB for trade and financial transactions - lends significant weight to the argument in favour of the currency's inclusion in the SDR later this year.

How the United States will play its cards will be interesting - so far, the official statements from Washington have been lukewarm at best. However, it is worth noting that, whereas most big IMF decisions require an 85 percent majority, effectively giving the US a veto, the SDR decision can be made with only 70 percent of the vote, if there's no significant change to the methodology.

If not now, the next SDR review is not till 2020. The IMF can theoretically conduct a review outside of those times, but this would be ill-advised and at odds with the IMF's stated aim to promote broader use of the SDR. Adding additional uncertainty about the timing of an SDR review would seriously hamper the SDR's prospects of becoming anything more than it is today.

By contrast, including the RMB this year would instantly make the SDR more reflective of the realities of the new world economy in which China is the largest exporter and has the second-largest GDP. By reducing reliance on the dollar, it would have the added benefit of making the international monetary system more stable.

The author is managing director and head of central banks and sovereign wealth funds, Standard Chartered.