The IMF endorsement is a bright spot in what has been a tumultuous year for the world’s second-biggest economy, which has been buffeted by slowing growth, a tumbling stock market and a shift by authorities toward a more market-oriented exchange rate.

?Approval is unlikely to have much impact on short-term demand for the yuan, given the SDR’s minor share of global reserves, according to economists at banks including HSBC Holdings Plc and ING Groep NV. But the backing of the IMF, as well as the financial reforms required for China to secure and maintain it, could propel use of the yuan past the pound and yen over the medium term, said Viraj Patel, a currency strategist at ING Bank in London.

"We’re going to see sort of the emergence of a renminbi trading bloc," mostly composed of Asian countries, Patel said in a phone interview before the decision, using the official name which means “the people’s currency” in Mandarin.

The decision should boost efforts by Xi to open up China’s financial markets. China implemented a series of reforms to win IMF support, such as opening its onshore bond and currency markets to foreign central banks and reporting its reserves to the IMF.

Eoin Treacy's view

This is a public relations success for Xi and his administration but is unlikely to have any influence on the Chinese intent to devalue its currency as it attempts to support its export sector. 

The Dollar found support against the Renminbi in early 2014 and continues to trend higher. A sustained move below the trend mean would be required to even begin to question medium-term demand dominance. 

This also helps to emphasise the fact China’s administration is willing to do what is necessary to support the economy as its transitions from an infrastructure development model to a services led model.