The International Monetary Fund agreed Monday to add the Chinese yuan to its reserve currency basket.
The decision — which marks another step in China's global economic emergence — came after the IMF evaluated the Asian nation's standing as an exporter and the yuan's role as a "freely usable" currency. In a statement, IMF Managing Director Christine Lagarde noted the yuan's inclusion is a "clear representation of the reforms" taking place in China.
"The continuation and deepening of these efforts 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," Lagarde said.
The addition of the yuan, or renminbi, will take effect next October.
Lagarde and the United States had supported its inclusion in the basket, known as Special Drawing Rights (SDR). It will join the euro, yen, pound and dollar in the reserves basket. The yuan will have about an 11 percent weighting in the SDR.
The IMF said the yuan's inclusion will make the SDR more diverse and representative of the international community.
The basket determines the currency mix countries like Greece receive when the IMF disburses financial aid. The decision to add the yuan will likely increase demand for the currency.
— Reuters contributed to this report.