The International Monetary Fund’s new Special Drawing Rights basket which includes the yuan will take effect on October 1. The weights of the basket currencies will be in the manner of 41.73 percent for the US dollar, 30.93 percent for the euro, 10.92 percent of yuan, 8.33 percent yen and 8.09 percent of the pound.

Currently, USD285 billion SDR is allocated to the members. In other words, the yuan’s inclusion would lead to capital flows of USD31 billion for direct SDR allocation. Data suggest that central banks around the world might have already started to re-allocate reserves.

"IMF endorsement certainly encourages reserve accumulation beyond SDR allocation. We expect the CNY will comprise 4 percent of global reserves, similar to that of Japanese Yen in three years’ time," DBS commented in its latest research report.

Moreover, the yuan is currently the second most active used currency in the Asia Pacific for payments with China and Hong Kong, following the JPY with a minimal gap. In 2015, some 30 percent of mainland trade was settled in the CNY, very close to the JPY’s usage.

Cumulative foreign institutional flows into yuan-denominated treasury bonds reached an all-time high of RMB321.9 billion (USD48.5 billion) in July, up by 28 percent from January. The Monetary Authority of Singapore (MAS) recently announced that yuan assets have been included as part of its official reserves since June.

Meanwhile, regulators have allowed cross-border remittances in onshore yuan as well as foreign currencies. The broader access and simplified process make it easier for overseas investors to tap into the growth of the China interbank bond market (CIBM), which is already the third largest fixed income market in the world.