MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) is looking at increasing its Chinese yuan holdings after the executive board of the International Monetary Fund (IMF) admitted China’s currency into its benchmark currency basket.
BSP Governor Amando Tetangco Jr. said the BSP is looking at increasing its exposures to the Chinese yuan currently limited to funds such as the Asian Bond Fund and certain money market instruments.
“We may consider, as part of diversification of our foreign exchange reserves, to increase our holdings of Chinese yuan assets,” Tetangco said.
Tetangco said the BSP is looking at investing in long-term bonds denominated in Chinese yuan.
“As the market for yuan bonds further develops and as external trade denominated in yuan increases, we may consider further increases including into long-term bonds as these become available,” he added.
The inclusion of the Chinese yuan in the IMF’s special drawing rights (SDR) basket makes it on par with the dollar, Japanese yen, British pound and euro.
With the IMF decision, Tetangco said the Chinese yuan composition in the international reserves of different countries would tend to go up.
“Investing in the yuan continues to be an option for the BSP, in line with its diversification policy to enhance the returns of international reserves as well as to diversify the currency composition,” he said.