The Chinese currency, while not yet fully free-floating, will account for 10 per cent of global reserves by 2015, a three-fold increase, central banks predict.

As China pushes to internationalise its renminbi currency, its efforts appear to be bearing fruit, at least according to a recent survey of central banks. The results found banks expecting the unit to account for 10 per cent of global reserves in 10 years’ time.

Such a rise would be up from an estimated 2.9 per cent at the end of this year, according to the South China Morning Post, which quoted a survey of 72 central banks. In total, the 72 banks hold $5.9 trillion of reserves. The survey was conducted by HSBC and Central Banking.

Some 35 central banks, or 53 per cent of respondents, said they were either investing or considering investing in the Chinese currency, but they remain concerned about how convertible the currency is, as well as about the liquidity of markets and credit quality, the report said.

Asian central banks seem to be the most optimistic about the future of the renminbi, with one reserve manager saying the share would reach 50 per cent by 2030, the report said.
China’s moves to make the renminbi a currency powerhouse – and rival to the dollar as a global reserve currency – are of a piece with its push to open its capital and financial markets to foreigners, such as its widely-heralded launch in November of the Hong Kong/Shanghai Stock Connect link, as well as a widening of quotas for foreign investors into Chinese equities.