SINGAPORE’S central bank said yesterday it will make financial investments in the yuan as part of its official foreign reserves from June, reflecting the yuan’s increasing global acceptance.
The Monetary Authority of Singapore said its decision "recognizes the steady and calibrated liberalization of China’s financial markets, and the growing acceptance of (yuan) assets in the global portfolio of institutional investors".
MAS has been making financial investments in the yuan since 2012, under a scheme that allows foreign institutional investors to buy equities and bonds listed on China's exchanges.
It also buys bonds in China's over-the-counter bond trading market, which was opened to foreign central banks in 2010
While the investments were part of MAS' foreign assets, they were excluded when computing the foreign reserves because of restrictions on the repatriation of the funds, the MAS said.
But "over the past year, China has taken significant steps to liberalize access to its foreign exchange and securities markets for foreign institutional investors," it said in a statement.
"For example, access to China’s interbank bond market was granted to most foreign institutional investors, and investment quotas were eliminated," it added.
"Restrictions on inbound and outbound remittances have been lifted and no prior approval is now required for the repatriation of funds invested in China’s interbank bond market."
Singapore's official foreign reserves totaled US$248 billion as of end 2015, data from the MAS website showed.