Malaysia buys China bonds in boost for renminbi

BoyRacer · September 20, 2010, 11:31am

Malaysia buys China bonds in boost for renminbi → channelnewsasia.com/stories/ … 52/1/.html

KUALA LUMPUR - Malaysia’s central bank has bought renminbi-denominated bonds for its reserves, a report said Monday, boosting Beijing’s ambitions to internationalise its currency.
The Financial Times did not specify the size of the investment and the Malaysian central bank declined to comment on the issue, in line with its policy of not discussing the management of its 95 billion dollars in reserves.
But the paper said the transaction had taken place recently and “was thought to have been accompanied or followed by purchases by other Asian central banks, although none of these has yet been identified.”
**China’s move in August to allow some central banks to invest in the domestic bond market was part of its push to promote the renminbi, or yuan, as a long-term rival to the US dollar, the business daily said.
**“In the short term, the news may even be welcomed in Washington. If other countries are starting to buy Chinese bonds as reserve assets, it may put upward pressure on the renminbi by increasing the two-way flows with the currency,” it said.

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