Enhancing gold reserves conducive to yuan's internationalization

HONG KONG - Experts attending a forum Monday on the theme of Gold and Currencies shared the view that enhancing gold reserves as well as the gold trading market is conducive to the internationalization of the Chinese currency yuan.

Chan Sheung-chi, president of the Chinese Gold and Silver Exchange Society, said that gold has its unique functions in risk prevention and avoiding inflation. Enhancing the gold trading market and gold reserves are conducive to the process of the internationalization of the yuan.

Speaking at the forum which was co-organized by the Asia-Pacific regional bureau of Xinhua News Agency and First Asia Merchants Bullion Ltd, Chan said the gold trading market in China has undergone a reform and opening up process. However, the market could still be improved and better integrated with the international market.

Experts at the forum shared the view that a more important role of gold reserves lies in risk prevention. It helps boost confidence in a country's currency, and reflect the country's economic and financial strength.

On yuan's internationalization process, Chan Fung-cheung from the City University of Hong Kong said that he held positive views about the future of the Chinese currency.

China is the world's largest gold producer and a major gold consumer. The updated figure showed China had surpassed Russia to become the fifth largest holder of gold reserves around the world, behind the United States, Germany, Italy and France.

Analysts say the country is boosting gold reserves while its currency seeks internationalization. China's central bank commented that the gold reserve increase was in line with the nation's needs to keep adjusting the structure of its international reserves assets in order to ensure the assets security, liquidity, and value increase.

China's central bank said it would flexibly adjust gold holdings according to its reserves and investment needs in the future.