The Hungarian National Bank has made the first step to invest in Chinese government bonds, according to a statement released by the bank on its website on Thursday.
The first phase of the investment was conducted through an indirect technique in cooperation with the BIS (Bank for International Settlements, Basel) in May 2015, the bank said, adding that "the investment does in no way jeopardize reserve adequacy, which is still regarded to be high."
Taking into consideration the growing significance of China in the global economy, the Renminbi's more pronounced role in the international monetary system, a decision was made to invest a small part of the foreign exchange reserves in Chinese government securities, the bank said.
The bank said that a significant factor in the decision was China's high credit rating. The investment in Chinese government securities is in line with the current international trends of foreign reserve management, as more and more central banks in both EU and non-EU countries are investing in China, the bank added.
When announcing its Renminbi Program on Feb. 19, 2015, the bank stated its intention to explore the opportunity of setting up a Renminbi denominated foreign reserve portfolio.
