IMF added the yuan to its SDR basket

The IMF added the yuan to its Special Drawing Rights basket yesterday, but what does that mean for the currency? 1) Effective Oct. 1, 2016, the renminbi will officially be recognized as a reserve currency, meaning central banks will have an alternative for foreign exchange reserves. 2) The basket's currency weighting will get mixed up, with the euro seeing the biggest percentage drop from the new formula. 3) The yuan also meets criteria of being "freely usable," or widely used for international payments and in foreign exchange markets, boosting China's influence in the global economy.