The Managing Director of the International Monetary Fund (IMF), Christine Lagarde, stated on Friday that the yuan should be included in the Fund’s Special Drawing Rights (SDR) basket of currencies, The Wall Street Journal newspaper reported.

According to the media outlet, Ms Lagarde expressed her support for the move after an IMF staff report concluded the yuan met the criteria for joining the elite basket of currencies. The IMF uses the basket to denominate its special lending reserve.

The IMF’s staff concluded – as quoted by the newspaper – that China’s currency was both “‘widely used’ for international transactions and ‘widely traded’ in the principal foreign exchange markets”.

Following the assessment, the IMF board is expected to approve later this month the inclusion of the yuan in the SDR basket, The Wall Street Journal added.

China’s central bank welcomed on Saturday Ms Lagarde’s statement, Chinese state-run news agency Xinhua reported.

At an earlier review in 2010, the yuan missed out on inclusion in the basket. The IMF said at that time the currency did not meet the “freely usable” criterion, the news agency added.

The SDR basket currently comprises the American dollar, the European Union’s euro, the Japanese yen and the British pound.