China's yuan set to benefit as central banks report doubts about US dollar
Central banks are showing more interest in the Chinese yuan as
doubts grow about the future of the US dollar, but this shift is not enough to challenge the greenback's dominance in global reserves, according to a new survey.
In its latest Global Public Investor poll released on Tuesday, the London-based Official Monetary and Financial Institutions Forum (OMFIF) said a net 14 per cent of reserve managers plan to increase their yuan exposure in the next two years, up sharply from the 2 per cent reported last year.
'The [US] dollar was the most in-demand currency in our survey last year, but there is now split sentiment … highlighting how geopolitics is directly feeding into doubts about the dollar,' said the think tank, which canvassed 75 of the world's central banks from March to May.
According to the poll, 20 per cent of respondents expect to add to their US dollar holdings in the next two years, but a similar proportion is looking to move away from the currency.
Diverging sentiment on the US dollar also extends to the banks' long-term strategies, with 25 per cent planning to increase their holdings over the next 10 years and 18 per cent expecting to reduce them.
'The clearest shift is towards the renminbi,' OMFIF said, adding that for the third consecutive year, 30 per cent or more of central banks expect to increase their yuan holdings over the next decade.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
South China Morning Post
30 minutes ago
- South China Morning Post
China, US finalise trade deal as Beijing confirms breakthrough in talks
China said on Friday that it would review and approve export applications for controlled items while the US would also remove some limits – confirming a breakthrough in trade talks centred on export controls. Beijing and Washington have been in close communication since trade talks in London earlier this month, with the two sides further confirming details of the framework, China's Ministry of Commerce said on Friday afternoon. 'China will review and approve export applications for controlled items in line with laws and regulations, while the US side will correspondingly lift a series of restrictive measures against China,' according to a statement from the ministry. More to follow Play Advertisement
South China Morning Post
32 minutes ago
- South China Morning Post
1,000 premium taxis to operate in Hong Kong in July, half the intended number
About 1,000 premium taxis will hit the streets of Hong Kong in July, falling short of the government's target by about 50 per cent, despite the positive responses received during the trial, according to an official. Advertisement Commissioner for Transport Angela Lee Chung-yan said on Friday that the Transport Department would grant official licences to five taxi fleets by the end of July and that the progress made on both the hardware and software of the fleets was satisfactory. 'Most of the taxi fleets have reached the 60 per cent threshold of their maximum capacity, in terms of the number of vehicles purchased and their hardware,' Lee said. 'Although some drivers and taxi owners might still be unfamiliar with the new taxi fleets, we are pleased to see fleets stepping up in their preparation work. With these recruitment schemes being increasingly well-received, I am confident that more drivers will join the fleets.' The Transport Department granted temporary licences to taxi fleets in July last year, saying that the five fleets combined would have more than 3,500 taxis. The department had set a deadline last year that the number of taxis in service by July 2025 should be at least 60 per cent of the 3,500, which was about 2,100 taxis. Advertisement Lee's revelation on the 1,000 taxis meant it fell short of its 2,100 target. The new fleets are aimed at elevating Hong Kong's taxi service standards, as existing cabs have acquired a reputation for cherry-picking or overcharging passengers.
South China Morning Post
34 minutes ago
- South China Morning Post
What's ahead for US-China tariffs, trade talks? Top experts weigh in
After months of chest-thumping, accusations and threats, look for US-China trade relations to weather an uneasy pause as the giants retreat from extremist positions, guard against backtracking and alter the negotiating dynamic toward an eventual agreement, analysts and former US officials say. The breather follows this month's London sit-down after the two engaged in a high-stakes tariff battle then went for each other's jugulars, with China blocking rare earth exports and Washington choking off jet engines and semiconductor software. 'Absolutely the trend lines point in the direction of a truce, a pause, a respite in US-China tensions,' said Jeremy Chan, a senior analyst at Eurasia Group. 'We're seeing signs of short-term stability that weren't there even a month ago.' The pause, which went into effect on May 12, is set to last three months if it is not extended. That is likely to result in US tariffs being capped at 55 per cent and China's at 10 per cent, according to analysts, with Washington using the hiatus to ensure that Beijing resumes rare earths exports and Beijing seeking more organised negotiations to moderate Trump's unpredictable approach. 05:19 How are Chinese citizens feeling the effects of the US-China tariff war? How are Chinese citizens feeling the effects of the US-China tariff war?
