Money

Kazakhstan bank mulls converting reserves to RMB

(Xinhua)
Updated: 2011-05-11 15:08

ALMATY -- The National Bank of Kazakhstan does not rule out converting part of its foreign reserves to Chinese yuan if it becomes an internationally recognized reserve currency, the bank CEO said Tuesday.

"To be part of our foreign reserves the yuan must be recognized internationally as both a hard currency and a reserve currency," said bank CEO Grigory Marchenko. "There are many discussions on that topic...We believe the changes will take place this year. If it happens, then part of our gold and foreign currency reserves will be converted to yuan."

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Marchenko said the National Bank will obtain the Chinese currency and Russian rubles through swap transactions.

Marchenko said after several months of negotiations, the National Bank of Kazakhstan and the People's Bank of China had "agreed to use swaps."

"That means we will give them tenge and they will give us yuan. But this will be recorded separately and yuan will not formally be part of our international reserves. The situation with the Russian ruble is the same," he said.

Marchenko also said that both the yuan and the ruble will gain in importance for Kazakhstan's foreign trade.

"We will not be acquiring them by converting dollars or euros or Japanese yen, but rather by swap transactions," Marchenko said. "That way our international reserves will remain unchanged while we will be obtaining additional ruble and yuan assets."