IMF close to declaring yuan fairly valued: report

According to the IMF, the selections of currencies for the SDR basket are based on two criteria -- the size of the country's exports and whether its currency is freely useable. The latter requires a certain degree of capital account convertibility.

During IMF's last review in 2010, the yuan met the export criterion, but not the freely useable criterion.

According to Zhu, the review this year will make full assessment on the use of yuan in commercial banks' liabilities, its share in global foreign exchange and derivatives transactions, its ranking in international reserves, and its proportion in the global bond market.

In addition to the technical statistics, the IMF will also review China's efforts to increase yuan capital account convertibility, said Zhu.

On Saturday, China's Central Bank Governor Zhou Xiaochuan said in a statement at the Spring Meetings in Washington that this year China plans to launch a series of reforms that target currently inconvertible items under the capital account, with the aim of further promoting capital account liberalization and making the yuan a more freely usable currency.

The IMF will fully evaluate China's capital account reforms in the SDR review, Zhu said.

As to when the yuan will be included in the SDR, Zhu said theoretically the SDR review will be concluded this year, but considering the complexity and the importance of the yuan, the IMF will remain flexible in terms of the timetable for the review.

Christine Lagarde, managing director of the IMF, said on Thursday that the Chinese authorities knew quite well what is desirable, what needs to be changed and improved in the monetary policy and in the financial sector in China.

"I believe what the Chinese authorities have actually indicated. ..will naturally be conducive to an assessment of whether or not the yuan is freely usable, which is as you know one of the key criteria," she said at a press briefing on the sidelines of the Spring Meetings.

The inclusion of yuan in the SDR has already received support from some advanced economies. During the Spring Meetings, British Finance Minister George Osborne said as part of the internationalization of yuan, it's sensible to see the yuan come into the basket.