Salem Radio Network News Monday, October 18, 2021

Business

Central banks will accelerate rise of China’s yuan – OMFIF report

LONDON (Reuters) – 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 on Wednesday.

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

Other eye-catching findings from the report showed that 75% of central banks now think monetary policy is having excessive influence on financial markets, although only 42% think these policies needs to be actively reconsidered.

In stark contrast to the yuan, 20% of central banks plan to reduce their holdings of the U.S. dollar over the next 12-24 months and 18% plan to reduce their euro holdings over the same time period.

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

(Reporting by Marc Jones; Editing by Tom Arnold)

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