DAIWA BRINGS A NOTE OF SKEPTICISM TO A YUAN SDR ROLE

Some investors are excited China's yuan is looking likely to be included in the IMF's basket of reserves currencies, the special drawing rights. But, what's so special about that? asks Daiwa. "We do not subscribe to the view that SDR inclusion will bring the CNY anywhere close to reserve-currency status. Neither would it create a surge in demand for the CNY or CNY-denominated assets in the short or medium term," says analyst Kevin Lai. The SDR is not a currency, nor can it circulate freely among buyers, the house reminds us. Private investors and banks do not hold or use the basket. It cannot be a reserve asset, provider of liquidity or help maintain exchange-range management. Still, Daiwa concedes, the decision to include the yuan, should it occur, would be "symbolically important for China," putting its currency in line with the U.S. dollar, British pound, the euro and the Japanese yen. (anjie.zheng@wsj.com; Twitter: @anjiezheng)