FILE PHOTO: U.S. Dollar and China Yuan notes are seen in this picture illustration June 2, 2017. REUTERS/Thomas White/Illustration/File Photo
FRANKFURT: The European Central Bank (ECB) said Tuesday it had exchanged part of its US dollar reserves for Chinese yuan for the first time, in a sign of the growing global importance of Beijing’s currency.
The Frankfurt institution “completed an investment equivalent to 500 million euros (RM2.4bil) of the ECB’s foreign reserves in Chinese renminbi (CNY) during the first half of 2017,” it said in a statement.
Justifying its decision, the ECB said that “the use of CNY as a global international currency has increased in recent years,” being declared a freely-usable currency by the IMF in 2015.
”The ECB’s investment also reflects the importance of China as one of the euro area’s largest trading partners,” it added.
Its purchase of the Chinese cash was paid for with “a small portion of its US dollar holdings, which remain the largest portfolio,” it added.
The ECB’s foreign reserves, held in US dollars, Japanese yen, Chinese renminbi, and International Monetary Fund Special Drawing Rights (SDRs), remained at the same overall size.
Figures released last month showed that the ECB’s official reserves stood at over 68 billion euros at the end of April, including 47.7 billion euros in foreign currencies and 18.8 billion euros in gold.
The ECB only publishes figures on its holdings of individual currencies in its annual report at the end of each year.
In December 2016, the central bank held US$46.8bil in US dollars (41.7 billion euros), and 1.1 trillion Japanese yen (8.8 billion euros). - AFP
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