Brazil’s Central Bank increased its reserves of Chinese renminbi (RMB) fourfold last year. It is the latest indication that the RMB is set to become much more influential in the global financial landscape.
A survey last week indicated that more than a third of central bankers around the world plan to add the Chinese currency to their reserve assets.
Brazil increased its RMB holdings while reducing its reserve of U.S. dollars and euros. This is a significant shift: until 2018, the Central Bank didn’t have any RMB reserves. Now the yuan is its third-largest currency. The U.S. dollar fell by about 5% to 80.34% of the total.
While its total share is still relatively small, the development shows that the Chinese government’s drive to internationalize the RMB is moving the needle. This follows Beijing’s enhanced economic diplomacy with other regional powers. Argentina recently announced that, as part of joining the BRI, China will subsidize its importation of Chinese goods.
SUGGESTED READING:
- Reuters: Central banks will accelerate rise of China’s yuan, global survey shows by Marc Jones
- China Lusophone Brief: Brazil’s central bank more than quadrupled foreign reserves in Chinese yuan
