New Zealand thus becomes only the second country after the UK to introduce the Chinese currency as a reserve currency.

 

The RMB will become the second largest reserve currency with a 20 percent weight, second only to the Australian dollar, which currently¹ holds a 22 percent weight.

 

Meanwhile, the US dollar slid from top spot with 31 percent into third place with a 12 percent weight.

 

The New Zealand central bank says the weight of each foreign reserve currency is decided² by the volume of the country's bilateral³ trade with New Zealand.

 

Last year, China became New Zealand's biggest trading partner and biggest export market with total bilateral trade hitting a record high of over 18 billion New Zealand dollars.

 

For more on this, we are now joined live by Gao Shang, analyst⁴ with Guantong Futures⁵.

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