The likelihood of China’s currency being included in the IMF’s special drawing rights basket of currencies has risen, according to a new report.

Analysts at ABN Amro point to the increased usage of the renminbi in global trade settlements, and the fact that the IMF seems to have softened its stance towards the Rmb since the last review in 2010.

The fund will make a decision later this year as to whether the Rmb meets the criteria of being a freely usable currency. It was rejected five years ago on the grounds that it was not fully liberalised and that the capital account and exchange rate regime were not free enough.

Effectively, it will mean that the currency is viewed as an accepted reserve currency around the world, joining the US dollar, the yen, the British pound and the euro in the basket.

Experts are divided on the significance of the inclusion, with Mike Vrontamitis head of trade, product management at Standard Chartered and a respected authority on currency describing it as a “red herring” in a call with GTR recently.

Many point to the fact that the Swiss franc is a popular reserve currency, yet is not included in the IMF’s SDR basket.

However, there is little doubt that the inclusion would represent a big step forward for a currency which was practically nowhere on the world stage a couple of years ago.

Arjen van Dijkhuizen, senior economist at ABN Amro, says that a positive decision from the IMF would almost certainly help speed up the Rmb’s internationalisation.

“Although inclusion of the yuan in the SDR basket is not a pre-requisite of being a reserve currency, it would support its further use in international trade and finance, as it would make the yuan a more internationally recognised currency and enhance its status as reserve currency. It will also make the SDR basket more representative of global trade and enhance the stability of the SDR basket given the yuan’s low correlation with the US dollar and euro,” he says.

“Swift’s data makes it clear that Rmb is becoming increasingly central to the business banks do with China and Hong Kong,” Surendra Rosha, HSBC

The report came on the heels of the latest Swift data, which found that over 1,000 banks around the world are now using Rmb for payments with China and Hong Kong – 35% of the global banking network. This represents a 6% increase on the figure from 2013 in volume terms, but a 22% hike in the number of financial institutions settling in Rmb.

“Swift’s data makes it clear that Rmb is becoming increasingly central to the business banks do with China and Hong Kong,” says Surendra Rosha, HSBC’s head of financial institutions for Asia Pacific. “As opportunities grow for banks’ clients to use Rmb in trade with China and to invest in its markets, we would expect financial institutions’ use of the currency to carry on increasing.”