IMF says on Tuesday that it welcomes China's move to improve forex formation system. 

The International Monetary Fund has welcomed China's move to improve its foreign exchange formation system.

An IMF spokesperson said in a statement on Tuesday that a more market-oriented exchange rate will facilitate the Special Drawing Right operation if the RMB is included in the SDR basket.

The IMF also said China has the ability to achieve an effectively floating exchange rate system within two or three years.

China's central bank on Tuesday announced the decision to improve its central parity system to better reflect market development in the exchange rate between the Chinese yuan against the U.S. dollar.