Yuan makes up one per cent of Namibia’s foreign reserves

WINDHOEK, 03 JUL  – The Chinese Yuan currency only made up 1 per cent of Namibia’s foreign reserves by 31 December 2017, but offered a competitive risk-adjustment return.
This was revealed by Bank of Namibia (BoN) Deputy Director for Corporate Communications, Kazembire Zemburuka in an interview with Nampa on Monday.
He added that the competitive risk-adjustment return linked to the Yuan’s higher yields and low correlation to other currencies that were already held at the time of inclusion.
The central bank included the Yuan currency as part of its foreign reserves since November 2016, following a decision by the International Monetary Fund (IMF)’s executive board to include that currency in the special drawing rights basket of currencies in October the same year.
Zemburuka said the addition better aligned the structure of foreign reserves to Namibia’s foreign obligations and trade composition.
The IMF reported on Friday that China’s share of allocated currency reserves increased for a third straight quarter to 1,39 per cent.
The IMF reported the Yuan’s share of central bank holdings for the first time in the fourth quarter of 2016.
Zemburuka further stated that the central bank’s decision to add or remove foreign reserve currency is influenced by patterns of foreign trade and obligations, which directly represents the potential calls on foreign exchange reserves.
Currently, the official foreign exchange reserves are denominated into three major reserve currencies, namely the South African Rand, European Currency (Euro) and the United States Dollar. The other currencies include the Angolan Kwanza and the British Pound sterling.

NAMPA