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Central banks will accelerate rise of China's yuan - OMFIF report

The Chinese yuan is on course to become a much more influential part of the global financial system with almost a third of central banks planning to add the currency to their reserve assets, a closely-followed survey showed on Wednesday.

Central banks will accelerate rise of China's yuan - OMFIF report

Chinese Yuan banknotes are seen in this illustration taken Feb 10, 2020. (Photo: REUTERS/Dado Ruvic)

LONDON: The Chinese yuan is on course to become a much more influential part of the global financial system with almost a third of central banks planning to add the currency to their reserve assets, a closely-followed survey showed on Wednesday.

The Global Public Investor survey, published annually by the London-based OMFIF think tank, showed 30per cent of central banks plan to increase yuan holdings over the next 12-24 months, compared to a much smaller 10per cent last year.

Other eye-catching findings from the report showed that 75per cent of central banks now think monetary policy is having excessive influence on financial markets, although only 42per cent think these policies needs to be actively reconsidered.

In stark contrast to the yuan, 20per cent of central banks plan to reduce their holdings of the U.S. dollar over the next 12-24 months and 18per cent plan to reduce their euro holdings over the same time period.

The report also showed that only 59per cent of central banks would be willing to use more than 30per cent of their reserves in the event of a serious currency shock, while 45per cent of pension funds now invest in gold, well up from 30per cent last year.

(Reporting by Marc Jones; Editing by Tom Arnold)

Source: Reuters

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