WASHINGTON, Aug 12 (Reuters) - China's move to revamp its currency regime this week may help the yuan earn a place in the small group of currencies the International Monetary Fund uses as a global benchmark, despite concerns the policy change could begin a round of competitive devaluations.
Beijing described its surprise devaluation of the yuan's value on Tuesday as a one-off step to make the currency more responsive to market forces, but some critics saw it as a thinly veiled effort to make China's exports more competitive and boost economic growth.
If Beijing's word holds true, IMF and other financial officials say, the move could burnish China's campaign to join the IMF's currency basket, known as Special Drawing Rights or SDR, which can be used to supplement member countries official reserves.
It's a distinction long sought by Beijing, both to encourage use of the yuan for trade and investment, and as diplomatic recognition of China's growing role in the world economy.
Finance officials, including officials at the U.S. Treasury, believe it is too early to say whether the devaluation is a move to more currency flexibility or an effort to gain a trade edge.
There is also worry that Chinese officials may see more weakness in their economy than they have disclosed and are using the devaluation to try to get ahead of upcoming problems.
In a late-night statement on Tuesday, the IMF welcomed China's move and said it appeared to be part of reforms to let market forces play a bigger role, something the Fund and the United States have long pushed China to do.
"We believe that China can, and should, aim to achieve an effectively floating exchange rate system within two to three years," it said.
"A more market-determined exchange rate would facilitate SDR operations in case the renminbi were included in the currency basket going forward," it added, using an alternative name for the yuan.
Joining the currency basket would put the yuan alongside the U.S. dollar, British pound, euro and Japanese yen.
It would be the first emerging market currency to be in the SDR, marking another stage in China's rise as a global economic player.
The IMF's board is scheduled to meet in November to decide whether to include the yuan in the SDR basket, which could then happen in 2016 when China assumes the presidency of the Group of 20 club of rich and developing nations.
The yuan is already the world's fifth most-used trade currency, but because it is not considered freely traded and China's capital markets are largely closed it has not qualified under the IMF's SDR criteria as "freely usable." (Reporting by Lesley Wroughton; Editing by Tim Ahmann and Clive McKeef)