The Chinese yuan, also known as the renminbi, is already convertible under the current account - the broadest measure of trade in goods and services. However, the capital account, which covers portfolio investment and borrowing, is still closely managed by Beijing because of worries about abrupt capital flows.

According to the IMF, the US dollar accounted for 62 per cent and the renminbi 1.8 per cent of the world’s US$11.4 trillion in outstanding reserves. Photo: Reuters

How China’s yuan can up its game as a reserve currency

The yuan has a gap to fill as the dollar’s share as a reserve currency slips and concerns about the euro’s future persist. However, market liberalisation and a hands-off approach to the currency in China are crucial.