China is building a yuan currency reserve

The People's Bank of China announced the creation of a reserve in yuan jointly with five other countries.

China has teamed up with Indonesia, Malaysia, Hong Kong, Singapore and Chile to support the yuan's liquidity by allocating 15 billion yuan (or about $2.2 billion) each to replenish the joint reserve. 

It is noted that if there is a need for liquidity, the central banks of 5 countries participating in the agreement will not only be able to use their contributions, but will also have access to additional financing. All funds will be stored in the Bank for International Settlements.

It is worth adding that China's foreign exchange reserves, already the largest in the world, increased last month for the first time in 2022 – by $80.6 billion, and reached $3.13 trillion.

Earlier, Russia and China, together with other BRICS countries (Brazil, India, China and South Africa), discussed attempts to develop a new reserve currency. A basket of such currencies will become an alternative to the dollar and the International Monetary Fund, which is dominated by the United States. 

In March, a deal was already concluded to sell Saudi oil in yuan. Such a deal, concluded without dollars, may signal a desire to reduce the excessive dependence of various countries on the US currency.