Australia’s central bank will start investing in Chinese bonds — an “important” decision that marks yet another win for China’s growing international financial influence.
“This decision to invest in China is an important one,” said Philip Lowe, deputy government of the Reserve Bank of Australia, BBC reported. “It reflects the broader economic relationship between China and Australia, and our increasing financial ties.”
The bank will invest about 5 percent of its foreign currency reserves in government bonds from China, BBC reported. RBA currently holds just over $39 billion in foreign currency reserves.
Australia’s announcement is significant in that it shows just how rapidly China’s economy is making headway around the world. Australia’s dollar is the third currency now to trade directly with China’s yuan, BBC said.
Economic analysts say China is actively promoting the yuan as a viable alternative to the U.S. dollar in the global market.