Washington suffered a diplomatic reverse after trying to dissuade its allies from joining the Chinese initiative, seen as a potential rival to the World Bank and Asian Development Bank, dominated by the United States and Japan.
Keen to avoid a second rift with Europe - even though the United States can block IMF decisions - Lew focused on the terms for admitting the yuan to the SDR rather than the timing.
"China will need to successfully complete difficult fundamental reforms, such as capital account liberalization, a more market-determined exchange rate, interest rate liberalization, as well as strengthening of financial regulation and supervision," he said.
While Washington believed Beijing has stopped intervening to weaken its currency, Lew said the true test would come when market pressure increased for the yuan to strengthen.
David Marsh, managing director of the central banking think-tank OMFIF, sees a "grand bargain" between China, the United States and the IMF taking shape under which Beijing would enter the heart of global finance in exchange for turning the yuan into a strong currency on world financial markets.
The Chinese central bank was using its $3.8 trillion in reserves to keep the yuan steady against the dollar. The Chinese currency has appreciated by 11 percent in trade-weighted terms in the past year.
"All of this is a potential challenge for the dollar and its pivotal position in world money," Marsh said in a briefing.
While there is no fixed set of indicators to measure the eligibility of a currency for the SDR basket, in 2011 IMF staff set out a number of indicators that could show whether a currency is "freely usable": - currency composition of official reserve holdings; - currency denomination of international banking liabilities; - currency denomination of international debt securities; - volume of transactions in foreign exchange spot markets.
More than 60 central banks hold the yuan in their reserves, according to China-focused bankers in London. Offshore trading in the yuan soared some 350 percent on Thomson Reuters trading platforms last year and rival platform EBS said the yuan was one of its top five traded currencies.
A former high IMF official, speaking on condition of anonymity, said 2015 was too soon for the yuan to qualify, but the Chinese central bank could use the review to persuade Communist Party leaders to move further towards convertibility.
Zhu Min, the IMF's Chinese deputy managing director, noted the yuan was increasingly used in trade and was also growing in capital markets.
"Clearly the RMB is already qualified, in a sense, on trade activity," he told reporters at the Boao Forum. "But on the freely usable side ... there are still some obstructions."
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