Data collection and analysis for this year's review of the SDR basket has started, and the IMF team will discuss technical issues with Chinese officials. [Photo/IC]

A team from the International Monetary Fund has arrived in Beijing to assess whether the yuan should be included in the Special Drawing Rights basket, according to a statement from the Washington-based organization.

Data collection and analysis for this year's review of the SDR basket has started, and the IMF team will discuss technical issues with Chinese officials, according to the statement.

IMF Deputy Managing Director Zhu Min said earlier that the preliminary results for the technical discussion will be released as early as July.

The SDR basket, which was created in 1969, is reviewed every five years. It is an international reserve asset that currently includes the US dollar, Japanese yen, British pound and the euro. The possible addition of the yuan is a major issue for this year's assessment.

An informal board meeting is due to be held in the middle of the year, with the formal review to take place by the end of the year.

The two-stage review process consists of a technical determination of whether the yuan meets SDR criteria－currencies must be from one of the world's top four exporters and be 'freely usable'－and a vote by the IMF Executive Board.

The yuan failed the review in 2010 as it was not considered 'freely usable'. The political backdrop at the time was negative for China, with the US claiming the currency was "substantially undervalued" and should be allowed to appreciate.

China's government has openly expressed its desire and plans to accelerate reforms to help its bid. Although the SDR is only a notional currency and accounting unit, Beijing sees the yuan's inclusion in the basket as an official endorsement of its progress and standing in the international financial system.

David Lipton, the IMF's first deputy managing director, said in May, "We welcome and share this objective and will work closely with the Chinese authorities in this regard."

It was a matter of when not if inclusion happens, he said, adding that the yuan is no longer undervalued.

Ma Jun, chief economist at the People's Bank of China, said inclusion would be "a milestone in the push for the yuan's internationalization".

Wang Tao, chief economist in China at financial services company UBS AG, said, "A more important reason behind senior Chinese policymakers' push for the SDR inclusion, we believe, is to catalyze financial sector reforms."

Zhou Xiaochuan, the central bank's governor, has said that, by the end of this year, the country will further ease cross-border portfolio investment controls, open its capital markets more and revise its general foreign exchange control regulations.

The outcome, however, will depend on votes. If 70 percent of the votes support China the yuan's inclusion will go ahead, and the US has no automatic right to veto the decision.