Unfortunately though, the yuan’s crowning coincides with the beginning of a new era of a stronger US dollar, as the Federal Reserve is widely expected to raise interest rates next month for the first time in almost a decade.

“As such, the CNY is likely to remain on the defensive against the USD, ahead of the Fed rate hike and amid global growth fears,” said Koon How Heng, senior currency strategist at Credit Suisse.

Heng expects the CNY to stabilise at around 6.40 against the USD in the near term, and weaken towards 6.60 in the next six to 12 months.

On the other hand, the yuan is still overvalued when compared with major currencies such as the euro and yen as well as emerging market currencies which have been on a steep downward slope since last year.

On a nominal effective exchange rate basis, which measures the comparable value of a currency against others, the yuan has appreciated 7 per cent over the past 12 months. Netting out inflation, the real effective exchange rate of the yuan has shot up 7 per cent year-on-year as of October, according to Bank for International Settlements data.

This means the currency is blanketed by depreciatory pressure, which would kick in as soon as the People’s Bank of China dials down its market intervention that has been helping the currency stay anchored at a stable level since the August fixing mechanism change, said BMI Research.

“While the positive SDR news may be marginally supportive for the yuan over the short-term, we continue to believe that fundamental pressures on the currency are to the downside.

“As the PBOC gradually liberalises the currency in line with IMF recommendations, we expect the currency to give in to depreciatory market pressures,” said BMI, which forecasts the USD/CNY to trade at 6.68 to the dollar in 2016.

In order to become a true reserve currency, Beijing should learn from history and tolerate greater volatility in the yuan, argues Michael Every, Asia Pacific head of financial markets at Rabobank.

“None of the world’s major reserve currencies enjoy the kind of stability that CNY has of late. Since 2007 there have been enormous swings in USD, EUR, JPY, GBP, CAD, AUD, and CHF to reflect fundamentals,” Every said in a report.

“China may want to advertise itself as being a new foreign exchange (FX) reserve option that will not suffer from the same kinds of volatility. However, it is unclear how it will be able to do so without divorcing itself from the global economy, which would rather defeat the objective of being an FX reserve currency in the first place.”