(CBN - Global) April 8 -- China's central bank is making efforts to encourage foreign governments to increase their holdings of the yuan as a reserve currency.
People's Bank of China Governor Zhou Xiaochuan has said the bank would like other countries to raise their reserve holdings of the Chinese currency. China's foreign exchange reserves are the world's biggest.
On April 7, the bank released data on China's foreign exchange reserves in both US dollars and Special Drawing Rights for the first time. The figure for March stood at USD3.21 trillion and SDR2.28 trillion. The International Monetary Fund will add the yuan to its SDR basket of currencies -- the dollar, euro, yen and pound -- on Oct. 1.
The bank said reporting forex reserves in SDRs would help reduce exchange rate fluctuations caused by valuation changes, and reflect more objectively the comprehensive value of China's foreign exchange reserves, as well as help to strengthen the SDR as an accounting unit.
The weights assigned to each currency in the SDR basket will be 41.73 percent for the dollar, 30.93 percent for the euro, 10.92 percent for the yuan, 8.33 percent for the yen, and 8.09 percent for the pound.