IMF shares concerns with China over mobility of funds

July 23, 2015 09:03
The IMF wants China to ease controls on capital flows and improve transparency in the financial markets. Photo: Bloomberg

The International Monetary Fund (IMF) has told China that it has some concerns in relation to investors' ability to enter or leave Chinese financial markets as they wish, Reuters reported.

The concerns were voiced last month when the IMF met with Chinese officials to discuss the chances of including the yuan in the fund's basket of currencies, or the Special Drawing Rights (SDR), the report said, citing sources familiar with the matter.

The IMF urged China, which still has a closed capital account, to improve the transparency of its financial markets, according to the report.

The talks were held before Chinese shares plunged as much as a third in late June, prompting Beijing to impose some curbs on market players.

The measures, which included steps such as barring some investors from selling their shares, drew criticism of unwarranted government interference and have cast doubt on China's appetite for market reforms, the report noted.

Beijing has been lobbying the IMF to include the yuan in fund's SDR basket to boost the currency's global clout.

The IMF requires any SDR currency to be "freely usable", a criteria that US Treasury Secretary Jack Lew said in April that China has yet to meet.

– Contact us at [email protected]