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IMF Puts Off Decision on Using China's Currency for Reserve Status

A teller counts yuan banknotes in a bank in Lianyungang, east China's Jiangsu province, Aug. 11, 2015.

The International Monetary Fund says it will delay a decision by a year on whether or not to include China's money in its basket of reserve currencies.

Reserve currencies are held by central banks to pay off international debt obligations or influence exchange rates. These include the dollar, yen, euro and the pound. IMF reserve currencies are supposed to be freely usable and widely traded internationally. China strictly controls its currency exchange rate and the flow of currency in and out of the country.

Christopher Whalen of the Kroll Bond Rating Agency said China's yuan was not likely to become a reserve currency until and unless Beijing allowed it to move and trade freely.

China's government roiled foreign currency and stock markets recently when it allowed the value of its yuan to drop sharply. Beijing said it was a move toward a more market-oriented method of determining exchange rates. Beijing's critics said it was a move to give Chinese exports a price advantage on global markets.

Some information for this report came from Reuters.