Israel’s central bank has included the Chinese renminbi in its foreign reserve holdings for the first time in its history.
The renminbi is one of four new currencies that the Bank of Israel (BOI) will add to its forex holdings for the first time, according to a report from Bloomberg.
Other currencies that BOI is adding to its reserves for the first time include the Australian dollar, the Canadian dollar, and the Japanese yen.
Israel’s foreign reserves have traditionally consisted of the US dollar, the euro and the British pound.
Andrew Abir, BOI deputy governor, said that the shift is part of a change in the monetary authority’s “whole investment guidelines and philosophy.”
Abir pointed in particular to “the need to earn a return on the reserves that will cover the costs of liability,” after BOI’s foreign reserves exceeded USD$200 billion for the first time last year.
Under the new arrangements the renminbi will account for 2% of BOI’s forex holdings, while Canada and Australia will have a 3.5% share each and the Japanese yen 5%.
In 2020 67.4% of BOI’s foreign reserves were in US dollars, 30.1% in euros and 2.5% in British pounds.
