For first time: Israel’s Central Bank replaces US dollar reserves with Chinese currency
Bloomberg reported that Israel added four new currencies – among them the Chinese Yuan (RMB) – to its central bank holdings in an unprecedented move in the country’s history. Additionally, Israel’s Central Bank will cut US Dollar (USD) and EUR holdings to diversify its foreign reserves.
Israel’s foreign currency reserves, which surpassed $200 billion last year for the first time, were traditionally comprised of US dollars, Euros, and British Pounds. Israel will now consist of Canadian dollars (CAD) and Australian dollars (AUD) in their foreign currency holdings. It will also include the Japanese Yen and the Chinese Renminbi.
Deputy Governor Andrew Abir called the decision a change in Israel’s “whole investment guidelines and philosophy.” He explained that the increase in Jerusalem’s foreign exchange reserves compelled the Central Bank to mull “the need to earn a return on the reserves that will cover liability costs.”