NIGERIA plans to hold 10 percent of its foreign exchange reserves in yuan "as soon as possible," its central bank Governor Lamido Sanusi said yesterday.

The nation plans to start holding the Chinese currency next quarter, predicting it will rise given the strength of China's economy, Sanusi said in Hong Kong, adding that the target was set more than a year ago. He said the yuan will "inevitably" become a reserve currency and that increased convertibility outside China had boosted its appeal.

The US$32 billion in Nigerian reserves are now 79 percent held in US dollars, with the rest largely in euros, Swiss francs and British pounds.

Asia's central banks are also diversifying their growing reserves into yuan debt. Philippine Finance Secretary Cesar Purisima said last Saturday that buying yuan may be "prudent."

"Confidence in China doesn't mean lack of confidence in America," Sanusi said. "Europe and America will continue to be important parts of the world. Having said that, it will be almost living in a dream world to ignore China. It's the second-largest economy in the world, and it's well-managed."

The yuan was the biggest gainer in August among Asia's 10 most-used currencies, excluding the yen.

Source:shanghaidaily