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A recent survey showed that the Chinese yuan is poised to become an important component of the global financial system, with around a third of central banks planning to add the Chinese currency to their reserves.
The Global Government Investor Survey, published annually by the Forum of Official Monetary and Financial Institutions, shows that 30% of central banks plan to increase their yuan holdings over the next 12 to 24 months, down from just 10% in the year last.
According to the survey, 75% of central banks believe that monetary policy currently has an exaggerated impact on financial markets, but only 42% see the need to reconsider these policies.
In contrast, 20% of central banks plan to reduce their holdings of US dollars over 12 to 24 months, 18% plan to reduce their holdings of euros and 14% want to reduce their holdings of euro area sovereign debt.
The survey showed that central banks, sovereign wealth funds and pension funds now control a record $ 42.7 trillion in assets.
The central bank’s reserves alone increased by $ 1.3 trillion to reach 15.3 trillion by the end of 2020.
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