Source: Yicai Global
Yuan reserves of central banks climbed to the highest in over four years during the first quarter, driven by China’s attractiveness to foreign investors.
- International Monetary Fund data released on June 30 showed that yuan reserves rose 6.7% to $287.5 billion from the fourth quarter of 2020 to mark the ninth straight quarter of growth.
- The proportion of the yuan in global foreign exchange reserves jumped to 2.5%, the highest since the last quarter of 2016.
- The currency appreciated by 1.2% against its US counterpart in the first semester.
- Vanguard Asia-Pacific Chief Economist Wang Qian said the growth is driven by the attractiveness of China with reduced risk and higher returns.
- Invesco Managing Director said the growth has been steady in the past years as the yuan was included in the IMF’s reserve asset of Special Drawing Rights.
- Investors are also attracted by an optimistic outlook on Chinese securities which are expected to outpace regional peers.