Israel adds China’s yuan for the first time ever while cutting its dollar holdings in biggest currency reshuffle in a decade

Israel’s central bank will add Chinese yuan while slashing its dollar and euro holdings in a move to diversify its reserve allocations and lengthen its investment horizon, Bloomberg reported.

“We need to look at the need to earn a return on the reserves that will cover the costs of the liability,” Deputy Governor of the Bank of Israel, Andrew Abir, said in an interview.

In addition to the yuan, the bank will also add the Canadian and Australian dollars, signaling a shift in the bank’s “whole investment guidelines and philosophy,” Abir said. Previously, the bank only held US dollars, euros, and the British pound.

Israel’s reserves stockpile will surpass $200 billion for the first time.

Moving forward, the yuan will take up 2% of the bank’s reserves, and both the Canadian and Australian currencies will have 3.5% each, according to the bank’s annual report.

The new additions means the euro’s share will fall from 30% to 20%, and the dollar will account for 61%, down from 66.5%.

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