THE Chinese yuan is on course to become a much more influential part of the global financial system with almost a third of central banks planning to add the currency to their reserve assets, a closely followed survey showed Wednesday.

The Global Public Investor survey, published annually by the London-based OMFIF think tank, showed 30 percent of central banks in the world plan to increase yuan holdings over the next 12-24 months, compared with just 10 percent last year.

It comes despite the differences between Western governments and China on the global stage. The yuan’s rise will almost certainly be a global trend, but may be especially strong in Africa, where almost half of central banks are planning to increase their yuan reserves.

Other eye-catching findings showed that 75 percent of central banks now thought monetary policy was having excessive influence on financial markets, although only 40 percent thought these policies needed to be actively reconsidered.

In stark contrast to the yuan, 20 percent of central banks plan to reduce their holdings of the U.S. dollar over the next 12-24 months and 18 percent plan to reduce their euro holdings.

Some 14 percent also want to cut their holdings of eurozone sovereign debt in what could be interpreted as a response to the European Central Bank’s deeply negative interest rates.

The report also showed that only 59 percent of central banks would be willing to use more than 30 percent of their reserves in the event of a serious currency shock, while 45 percent of pension funds now invested in gold, up from 30 percent in last year’s survey. (SD-Agencies)