China could see inflows of as much as $3 trillion into renminbi assets over the medium-to-long term as successful inclusion of the yuan in the International Monetary Fund's (IMF) reserve currency basket sets the stage for further opening of the country's financial markets.
Monday's momentous decision will see the Chinese yuan (CNY) hold a 10.9 percent weighting in the Special Drawing Rights (SDR) basket, higher than the yen and sterling's 8 percent but well below the euro's 30.9 percent and the greenback's 42.9 percent.
"This should help underpin China's continuing efforts to internationalize the currency and its capital account—moves which, our research suggests, could lead to inflows of up to $3 trillion over the next few years," said Hayden Briscoe, managing director of Asia Pacific fixed income at asset manager AllianceBernstein (AB), on Tuesday.
Morgan Stanley meanwhile expects inflows to top $2 trillion over ten years, with flows from foreign exchange reserve managers making up the largest share, according to a Tuesday report.
But strategists are quick to point out that these inflows don't hinge just on Monday's news.