BOFIT Viikkokatsaus / BOFIT Weekly 2017/14

The IMF's latestreport on Currency Composition of Foreign Exchange Reserves (COFER) included the Chinese yuan separately for the first time. As of end-December, the value of yuan-denominated foreign exchange reserve assets was $85 billion, just over 1 % of the $7.9 trillion of foreign exchange reserves globally. In addition to currency investments, central banks have other assets in their reserves, so that the total value of central bank foreign exchange reserves at the end of 2016 was around $10.8 trillion. COFER data are based on the information of 146 reporters. The IMF does not publish data on the structure of the reserves of individual countries.

The decision to specify yuan-denominated investments reflects the inclusion of the yuan in the IMF's SDR currency basket at the beginning of October 2016. Besides the other four SDR currencies, the Canadian dollar and Australian dollar are more important than the yuan as international reserve currencies.

Expectations of yuan depreciation and China's capital control measures have eroded international confidence in the yuan. The yuan had managed to approach the Japanese yen as the fifth-most-used currency in international payments, but since has again been surpassed by the Canadian dollar. Yuan deposits in Hong Kong have fallen substantially from their record levels of 2015.

Weights of main currencies in SDR basket, shares in global currency reserves (12/2016) and international payments (2/2017), %

Sources: IMF and SWIFT.