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.

Some 14 per cent also want to cut their holdings of euro zone sovereign debt in what could be interpreted as a response to the European Central Bank’s deeply negative interest rates.

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

It estimated that central banks, sovereign wealth funds and public pension funds control a record US$42.7 trillion worth of assets. Central bank reserves alone rose US$1.3 trillion last year to new high of US$15.3 trillion.

The report also showed the dramatic impact the coronavirus and the lower-for-longer interest rate outlook was having.

Trends in diversification – to boost or maintain returns, or to incorporate a more sustainable investment approach – are accelerating.

In their search for yield, close to 30 per cent of global public investors – central banks, sovereign wealth funds and public pension funds – will reduce their exposure to developed market sovereign bonds, while more than 20 per cent plan to buy more emerging market government debt.

Just over a quarter of central banks also plan to expand their corporate bond holdings and 21 per cent will increase their allocations towards equities.

It is likely to add to the concerns the central banks themselves have that experimental monetary policy, such as negative interest rates and mass stimulus programmes, are exerting excessive influence on financial markets.

“The way central banks are intervening in the market produces substantial changes to the prices of some assets and can lead to financial bubbles,” one unidentified central bank respondent cited in the report published on Wednesday said.

Global public investors are also increasing demand for sustainable assets and becoming more active investors. Some 92 per cent of central banks invest in green bonds and 21 per cent already in sustainable equities. Around 65 per cent of central banks plan to add to their green bond holdings, up from 45 per cent last year.

One in 10 central banks also said that sustainability was now their joint-most important institutional priority, although 50 per cent still did not explicitly implement environmental, social and governance (ESG) considerations in their portfolios.

“There has definitely been an acceleration [towards ESG] due to Covid-19,” OMFIF’s Chief Economist Danae Kyriakopoulou told Reuters.

“At the beginning [of the pandemic], we thought there would be a focus on the short-term, the quick boosts to recoveries. But actually there has been this realisation that our financial systems are so vulnerable to things outside the financial world.”