Malaysia central bank may invest in China

Malaysia’s central bank could include yuan-denominated assets in its foreign exchange reserves as the declining value of the dollar has led to calls for a new global reserve currency, the Wall Street Journal reported. Bank Negara Malaysia could be the first central bank to buy Chinese government debt as a secure reserve, in what would be a symbolic milestone for Beijing; China hopes to promote the renminbi as an eventual alternative to the dollar. The China Securities Regulatory Commission on June 12 approved Bank Negara Malaysia as a qualified foreign institutional investor (QFII), which would allow it to invest in exchange-traded equities and debt. However, the bank’s allotted QFII quota is unlikely to be large enough to lead to a significant departure from current investment practices.