China is building a yuan currency reserve to compete with the dollar and prop up other economies facing volatility
The People’s Bank of China is building a yuan reserve with five other nations in collaboration with the Bank for International Settlements.
China is teaming up with Indonesia, Malaysia, Hong Kong, Singapore, and Chile, with each contributing 15 billion yuan, about $2.2 billion, to the RenminbiArrangement, China’s central bank said in a statement Saturday.
“When in need of liquidity, participating central banks would not only be able to draw down on their contributions, but would also gain access to additional funding through a collateralised liquidity window,” the bank said.
According to the report, the funds will be stored with the Bank for International Settlements.
Russia and China have been attempting to develop a new reserve currency with other BRICS countries, Russian President Vladimir Putin said last week.
The basket of currencies would present an alternative to the US-dominated International Monetary Fund and include contributions from Brazil, Russia, India, China, and South Africa.