Despite the inclusion of the yuan in the IMF's Special Drawing Rights, progress toward the Chinese currency becoming a more important global currency has lost momentum over the last two years, Fitch Ratings said Tuesday.
The agency said policies to contain capital outflows and ongoing concerns over currency depreciation are likely to hold back internationalization in the short-term.
Nevertheless, a gradual increase in holdings by reserve managers could still support China's rating profile over time.
Countries whose currencies have a significant role in global official foreign-exchange reserve portfolios are less likely to experience external funding stress, reflecting stable demand for assets denominated in their currency, Fitch noted.
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