Why the Bundesbank is a reluctant Rmb investor

German central bank will include the renminbi in its currency reserves but meanwhile slams China for interfering in markets. The move showcases institutional investors' struggle to deal with China’s growing influence.

Deutsche Bundesbank’s Andreas Dombret said on Monday that China needs to dismantle its system of currency controls and win the trust of foreign investors before the renminbi can become a more widely used currency.

In the same breath, the German central banker announced the Bundesbank had decided to include the renminbi in its currency reserves. The move appears to have been taken reluctantly given his opinions on China’s currency policy making.

“The frequent and somewhat difficult to predict changes in regulation and the perceived high degree of political interference in the renminbi price formation all of that places a burden on the trust of foreign investors in...

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