The International Monetary Fund decided Monday to include China's yuan in a basket of key international currencies in a move expected to serve as a boon to the world's second-largest economy.

The IMF decided at an executive board meeting to add the yuan, also known as the renminbi , to the special drawing right  basket of currencies currently made up of the U.S. dollar, euro, Japanese yen and British pound.

The decision has been widely expected after IMF Managing Director Christine Lagarde said earlier this month that the IMF staff assesses the yuan meets the requirements to be included in the SDR basket and that she also supports the assessment.

"The board today decided that the RMB met all existing criteria and, effective October 1, 2016 the RMB is determined to be a freely usable currency and will be included in the SDR basket as a fifth currency," the IMF said in a statement.

The yuan will have a 10.92 percent weighting in the SDR basket while the weights of other SDR currencies will be 41.73 percent for the U.S. dollar, 30.93 percent for euro, 8.33 percent for the Japanese yen and 8.09 percent for the pound, IMF said.

Lagarde called the decision "an important milestone in the integration of the Chinese economy into the global financial system."

"It is also a recognition of the progress that the Chinese authorities have made in the past years in reforming China's monetary and financial systems," Lagarde said. "The continuation and deepening of these efforts will bring about a more robust international monetary and financial system, which in turn will support the growth and stability of China and the global economy."

IMF said the yuan's inclusion will enhance the SDR's attractiveness by diversifying the basket and making it more representative of the world's major currencies. (Yonhap)