China’s yuan to become more influential part of the global financial system, survey shows

Global Public Investor survey showed 30 per cent of central banks plan to increase yuan holdings over the next 12-24 months, compared with just 10 per cent last year

Published annually by the London-based OMFIF think tank, the survey showed 20 per cent of central banks plan to reduce their holdings of the US dollar

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

Published: 2:00pm, 22 Jul 2021Updated: 9:13pm, 22 Jul 2021

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.

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

It comes despite the differences between Western governments and China on the global stage. The yuan’s rise will almost certainly be a global trend, but may be especially strong in Africa where almost half of central banks are planning to increase their yuan reserves.

Other eye-catching findings showed that 75 per cent of central banks now thought monetary policy was having excessive influence on financial markets, although only 40 per cent thought these policies needed to be actively reconsidered.

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

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