Foreign exchange reserve managers from central banks have generally increased confidence in renminbi (RMB), and many are expected to increase their renminbi reserves, according to a study released by the European Central Bank (ECB) on Tuesday.
The report titled "The International Role of the Euro" is the 17th annual assessment report on the use of the euro issued by the ECB. Central bank reserve managers out of 79 central bank reserve managers, who manage half of the world’s foreign exchange reserves, 29 expect that the ratio of RMB assets will rise to 10 to 20 percent in the foreign exchange portfolios by 2020.
The report shows that the proportion of RMB in global foreign exchange reserves has steadily increased since it was officially incorporated into the IMF Special Drawing Rights (SDR) on October 1, 2016.
ECB headquarters in Frankfurt, Germany /VCG Photo
ECB headquarters in Frankfurt, Germany /VCG Photo
It also points out that 60 percent of the reserve managers interviewed believe that the rise in interest rates is the primary risk in managing foreign exchange reserves as most of their portfolios are bond assets that are sensitive to changes in interest rates.
Given the international role of the euro, ECB President Mario Draghi pointed out in the report that the euro remains the second largest currency in the international monetary system. The use of the euro in global payments and foreign exchange settlement has increased since last year.