Renminbi investments now part of MAS official foreign reserves

RENMINBI financial investments made by Singapore's central bank are now part of its official foreign reserves (OFR), underscoring the growing international acceptance of the Chinese currency.

The Monetary Authority of Singapore (MAS) said on Wednesday that its RMB financial investments are part of its OFR from this month.

MAS deputy managing director, Jacqueline Loh, said: "The inclusion of RMB assets in MAS' OFR is timely. China's calibrated financial liberalisation in the past year has encouraged growing international acceptance of the RMB."

Since 2012, MAS has been making RMB financial investments through China's Qualified Foreign Institutional Investor and interbank bond market schemes, said the central bank.

Though these investments have been part of MAS' foreign assets, "it was not possible to include these investments in OFR as there were previously restrictions on the repatriation of these funds," said MAS.

With China taking significant steps over the past year to allow more access to its foreign exchange and securities markets for foreign institutional investors, steps have been taken by Singaporean and Chinese authorities to facilitate cross-border RMB flows.

For example, three initiatives were announced in November last year to grow channels for such flows to support greater use of the RMB outside China.

The International Monetary Fund (IMF) announced in November 2015 that the RMB met the criterion of a freely usable currency and would therefore be included in the SDR basket with effect from October 1, 2016.

It was reported by the Fund that RMB-denominated assets comprised 1.1 per cent of total foreign assets held by official holders of foreign exchange as at end-2014.