KATHMANDU, March 31 (Xinhua) -- Nepal's central bank's investment in Yuan-based Chinese securities had increased by nearly five times over the last five years, Nepal Rastra Bank (NRB) said.
The NRB first got a quota of investing up to 1.2 billion Yuan (190 million U.S. dollar) from People's Bank of China as per the Memorandum of Understanding (MoU) signed between the central banks of the two countries in June 2013.
After the signing of the agreement, the NRB started investing in Chinese securities. Nepal's central bank's investment, as of end of December 2017, reached 5.67 billion Yuan (900 million U.S. dollar), 4.7 times more than initial quota determined for NRB, the Nepali central bank said.
"This is 9.7 percent of the total investment made by NRB abroad in foreign currencies," Rajendra Pandit, assistant spokesperson of NRB told Xinhua on Friday.
Nepal's central bank has invested a total of 8.4 billion U.S. dollars in foreign securities market in different currencies as of December 2017.
Nepal's central bank started investing in Yuan-based securities to diversify its investments in a bid to minimize risks and maximize its earnings.
"As yield from investments in Chinese securities is relatively higher compared to the U.S. dollar and Euro based securities abroad, we are increasing a portion of investment in Chinese securities," said Pandit.
According to the NRB, yield in Yuan is 3.4 percent while it is 1.72 percent in U.S. dollar, 0.01 percent in Euro and 6.1 percent in Indian currencies.
