Chinese Yuan VS US Dollar - Economist

The Global Government Investor Survey, published annually by the Forum of Official Monetary and Financial Institutions, showed that the Chinese yuan is about to turn into a much more important component of the global financial system, with about a third of central banks planning to add the currency to their reserves.

The survey shows that 30 percent of central banks plan to increase their yuan holdings over the next 12-24 months, compared to just 10 percent last year.

According to the survey, 75 percent of central banks believe that monetary policy has an exaggerated impact on financial markets at present, but only 42 percent see the need to reconsider such policies.

In contrast to the yuan, 20 percent of central banks plan to reduce holdings of US dollars over 12-24 months, 18 percent plan to reduce holdings of euros, and 14 percent want to reduce holdings of eurozone sovereign debt.

The survey showed that central banks, sovereign wealth funds, and pension funds now control $42.7 trillion in assets, a record high. Central bank reserves alone increased by 1.3 trillion dollars to 15.3 trillion by the end of 2020.