Germany’s central bank has said it will include China’s yuan in its reserves, giving another boost to Beijing’s drive to internationalise the currency and helping send the unit to two year highs. The German central bank regularly reviews the composition of its currency reserves “by weighing risks and benefits”, Wuermeling said. The Bundesbank’s currency reserves totalled some 170 billion euros ($210 billion) in November. China’s central bank only allows the tightly controlled yuan to rise or fall two percent on either side of a daily reference rate to prevent volatility but it takes into account market pressures when making its decision. But the latest rise could lead officials to intervene, analysts say, to prevent the currency becoming too expensive.

Source: Punch January 16, 2018 05:03 UTC