Global Central Banks To Increase Yuan Assets In FX Reserves-Herald

Overseas central banks and sovereign wealth funds are expected to increase yuan assets in foreign exchange reserves correspondingly after the yuan’s weighting in the Special Drawing Rights currency basket was officially lifted to 12.28% by IMF on Monday, which will help stabilise yuan under the U.S. rate hike cycle, the 21st Century Business Herald reported citing an unnamed Wall Street asset manager. This will effectively hedge against the negative impact of overseas arbitrage capital's reduction of yuan bonds, making it more difficult to speculate on the concept of capital outflow and short-selling yuan, the newspaper said citing a FX trader in Hong Kong.