China's currency - the Renminbi - has officially been added to the institution's Special Drawing Rights basket. IMF Managing Director Christine Lagarde made the announcement on Friday, noting that this is "the first time" the SDR basket has been expanded, and hailed it as a "historic milestone" for China.

"I'm very pleased to announced that tomorrow, October 1st, 2016, the new Special Drawing Right basket will become effective," she said.

"Because as of tomorrow, the renminbi will be considered by the international community as a freely usable international currency and will join the basket of the Special Drawing Rights together with the U.S. dollar, the euro, the yen and the British pound."

The IMF chief said that the inclusion of the renminbi in the SDR basket will further diversify the currency, and will render the basket more representative of global currencies and the global economy.

It will bring about a more robust international monetary and financial system, which in turn will be good for the stability and growth of China.

The SDR is an international reserve asset created by the IMF in 1969 to supplement its member countries' official reserves. It can be exchanged among governments for freely usable currencies in times of need.

According to the IMF, the renminbi will gain the third largest portion of the basket, at about 11 percent, behind the US dollar and the Euro.