Currency Weightings Of Reserve Portfolios May Be Shifting

The issue of FX reserve managers diversifying into equities has been a growing topic of debate for some time now. As far back as July of last year, The Time Weekly (based in Guangzhou, China) published a profile of Zhu Changhong, the chief investment officer of SAFE, which highlighted his role in st...

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Bibliographic Details
Published in:Global Finance 2014-09, Vol.28 (8), p.5
Main Author: Derrick, Simon
Format: Article
Language:English
Subjects:
Bank reserves
Central banks
Currencies
Currency
Emerging markets
Equity
Foreign exchange
International
Investment advisors
Public sector
Securities markets
Stock exchanges
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Summary:The issue of FX reserve managers diversifying into equities has been a growing topic of debate for some time now. As far back as July of last year, The Time Weekly (based in Guangzhou, China) published a profile of Zhu Changhong, the chief investment officer of SAFE, which highlighted his role in stepping up the regulator's investments in US corporate bonds, equities and real estate. The paper also noted that SAFE had invested in Japanese equities during the second half of 2012, before stocks surged in value. While some FX reserve money will undoubtedly find its way into the larger emerging equity markets, the attraction of the developed markets for any central bank manager remains that they have deep and unrestricted currency markets (making entry and exit relatively painless).
ISSN:0896-4181