The head of the International Monetary Fund, Christine Lagarde, says that she supports the bid to add China's yuan to the organization's exclusive club of the world's top currencies.

On Friday, she said that she supports findings by staff at the International Monetary Fund that the yuan meets the conditions for inclusion in the basket of currencies used in the fund's operations.

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According to SCnow, China has always wanted the yuan to be included in the IMF's basket of currencies. This would mean that the IMF could use the yuan to issue emergency loans and IMF member countries can use it to bolster their own reserves in case of crisis.

Joining the basket would also give the yuan the IMF's seal of approval and would encourage foreigners to use the Chinese currency a lot and to have more trust in the China's financial markets, ABC News reported.

"I support the staff's findings," she said in a statement. The statement was immediately supported by the central bank of China, which said it hoped the international community would also back the yuan's inclusion.

The yuan would join the U.S. dollar, euro, British pound and Japanese yen. The tightly managed yuan does not trade freely, unlike those currencies.

Earlier this month, however, China announced that it will let the yuan trade freely by the year 2020, potentially easing trade tensions with the United States and other nations. The recommendations from IMF staff regarding the yuan will go before a vote by the organization board on Nov. 30.

The backing from IMF comes few days after China's yuan moved closer to joining other top global currencies in the IMF's benchmark foreign exchange. It happened after Fund staff and IMF chief Christine Lagarde gave the move the thumbs up.

According to Reuters, joining the Special Drawing Rights (SDR) basket would be a victory for Beijing, which has campaigned very hard for the move to take place, and might increase demand for the yuan among foreign reserve managers as well as mark an important coming of age for the world's second-largest economy.

TagsInternational Monetary Fund, Christine Lagarde, IMF, British pound, Japanese yen, Special Drawing Rights, China's Currency, China's central bank