BEIJING: Germany’s central bank has said it will include China’s yuan in its reserves, giving another boost to Beijing’s drive to internationalize the currency and helping send the unit to two year highs.
The Bundesbank said its board had decided in July to invest in the renminbi, as it is also known, to take account of its growing importance globally, though it did not say when it would begin to include it or how much it would purchase.
“The decision to accept the renminbi is part of a long-term diversification strategy and reflects the growing role of the Chinese currency in the world financial system,” Bundesbank board member Joachim Wuermeling said on Monday.
The German central bank regularly reviews the composition of its currency reserves “by weighing risks and benefits,” Wuermeling said.
“In addition to dollars and yen, (the bank) has invested in Australian dollars since 2013 and seeks to invest in other currencies.”
The move comes after the European Central Bank in June converted €500 million (SR2.275 billion) worth of its dollar reserves into yuan.
China was Germany’s top trade partner in 2016, ranking first in the European country’s imports and fourth as an export destination.
The Bundesbank’s currency reserves totaled some €170 billion in November.
The yuan has gained increasing global clout in recent years and in September 2016 it joined the dollar, pound, yen and euro in the IMF’s elite “special drawing rights” reserve currency basket.
It strengthened to 6.4138 against the dollar on Monday, its highest level since December 2015, according to China’s Foreign Exchange Trade System, but weakened slightly to 6.4319 on Tuesday.
The unit has rallied from lows close to 7.0 against the greenback seen at the turn of the year, with the dollar also coming under pressure from most other currencies.
China’s central bank only allows the tightly controlled yuan to rise or fall two percent on either side of a daily reference rate to prevent volatility but it takes into account market pressures when making its decision.
But the latest rise could lead officials to intervene, analysts say, to prevent the currency becoming too expensive.
Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered in Hong Kong, said: “Policy reactions may include outright interventions right before close, or a relaxation of outflow control measures to release the yuan appreciation pressure.
“The government will likely gradually expand the range each year, paving the way for a lightly managed float in two to three years.”
The yuan’s weakness against the dollar has been a sensitive issue with the US, with President Donald Trump in the past hitting out at what he calls unfair trade practices by China aimed at giving their exporters an advantage over US firms.
Germany to add China’s yuan to currency reserves
Germany to add China’s yuan to currency reserves
Acwa signs key terms to develop 5GW of renewable energy capacity in Turkiye
JEDDAH: Saudi utility giant Acwa has signed key investment agreements with Turkiye’s Ministry of Energy and Natural Resources to develop up to 5 gigawatts of renewable energy capacity, starting with 2GW of solar power across two plants in Sivas and Taseli.
Under the investment agreement, Acwa will develop, finance, and construct, as well as commission and operate both facilities, according to a press release.
The program builds on the company’s first investment in Turkiye, the 927-megawatt Kirikkale Independent Power Plant, valued at $930 million, which offsets approximately 1.8 million tonnes of carbon dioxide annually, the statement added.
A separate power purchase agreement has been concluded with Elektrik Uretim Anonim Sirketi for the sale of electricity generated by each facility.
Turkiye aims to boost solar and wind capacity to 120GW by 2035, supported by around $80 billion in investment, while recent projects have already helped prevent 12.5 million tonnes of CO2 emissions and reduced reliance on imported natural gas.
Turkiye’s energy sector has undergone a rapid transformation in recent years, with renewable power emerging as a central pillar of its strategy.
Raad Al-Saady, vice chairman and managing director of ACWA, said: “The signing of the IA (implementation agreement) and PPA key terms marks a pivotal moment in Acwa’s partnership with Turkiye, reflecting the country’s strong potential as a clean energy leader and manufacturing powerhouse.”
He added: “Building on our long-standing presence, including the 927MW Kirikkale Power Plant commissioned in 2017, this step elevates our partnership to a new level,” Al-Saady said.
In its statement, Acwa said the 5GW renewable energy program will deliver electricity at fixed prices, enhancing predictability for grid planning and supporting long-term industrial investment.
By replacing imported fossil fuels with domestically generated clean energy, the initiative is expected to reduce Turkiye’s exposure to global energy market volatility, strengthening energy security and lowering long-term power costs.
The company added that the economic impact will extend beyond the anticipated investment of up to $5 billion in foreign direct investment, with thousands of jobs expected during the construction phase and hundreds of high-skilled roles created during operations.
The energy firm concluded that its existing progress in Turkiye reflects a strong appreciation for Turkish engineering, construction, and manufacturing capacity, adding that localization has been a strategic priority, and it has already achieved 100 percent local employment at its developments in the country.
