Germany to include Chinese yuan in currency reserves https://t.co/NH7tUEQFzZ pic.twitter.com/RB7cdK8MJx
— RT (@RT_com) January 15, 2018
Europe’s central banks are starting to replace dollar reserves with the yuan
- QuartzThe Chinese yuan hit a two-year high against the US dollar this week, after the German Bundesbank said that it would include the yuan in its reserves for the first time. “The notable development from the European point of view over the past few years has been the growing international role of the renminbi in global financial markets,” Andreas Dombret, a member of the central bank’s executive board, reportedly said at a conference in Hong Kong (paywall). The decision was made last year and no investments have been made yet, as preparations are still in process. The French central bank then revealed that it already held some reserves in yuan.
As most central banks’ reserves are held in dollars, any shift into other currencies, such as the yuan, will come at the expense of the greenback. In June, the European Central Bank announced that it had exchanged €500 million ($611 million) worth of US dollar reserves into yuan securities. This was a small shift—the ECB has €44 billion in foreign exchange reserves—but nonetheless it reflects China’s growing prominence in the global financial system.
Bank of France currency reserves partly held in Chinese yuan
- ReutersPARIS, Jan 15 (Reuters) - The Bank of France said on Monday it already held some currency reserves in yuan, hours after the German central bank said it was looking to move some of its reserves into the Chinese currency.
“Currency reserves remain in their vast majority invested in U.S. dollar, with a diversification towards a limited number of international currencies such as the Chinese renminbi,” the bank said in a statement.
The yuan leapt to its strongest level in more than two years against the dollar on Monday, buoyed by the Bundesbank’s comment.
The French central bank said it would not reveal a breakdown of its reserves, and did not say when it first included the yuan. (Reporting by Yann Le Guernigou and Michel Rose; editing by John Stonestreet)
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