The Central Bank of Iraq announced on Monday its investment in the Chinese yuan, indicating that the government bonds associated with this currency are characterized by high returns.
The bank said in a statement that it signed a banking arrangements agreement with the People’s Bank of China through its investment department, noting that the agreement will contribute to the development of banking relations with global economies, especially with the Chinese economy.
The bank added that it “invested in the Chinese yuan currency after being included in the basket of special drawing rights by the International Monetary Fund in late 2016, which led to raising the currency of the Chinese yuan in international liquidity,” adding that “the investment comes to diversify its reserves Foreign exchange and diversification of currency basket in investment portfolios, as well as the importance of geographical distribution of investments of this bank.
“Government bonds linked to the Chinese yuan have higher returns than other currencies, including the US dollar,” the bank said.
The yuan is the official Chinese currency which is used in the People’s Republic of China. It is divided into the following categories: one yuan, 2 yuan, 5 yuan, 10 yuan, 20 yuan, 50 yuan, 100 yuan.
The Chinese yuan is one of the most widely traded currencies in the world. For decades, China has been keen to keep the yuan low, giving it a distinct advantage against other currencies and the ability to boost China’s export earnings.