(AP) Australia's central bank says it will invest up to 5 percent of its foreign currency reserves in Chinese government bonds as economic and business ties between the two countries deepen.
The Reserve Bank of Australia says Wednesday it will be the first time it has invested in the sovereign bond market of an Asian country other than Japan.
Deputy Governor Philip Lowe says in a speech given in Shanghai and posted on the bank's website that it expects China's yuan to eventually become one of the major reserve currencies in the region.
He says the plan to invest in Chinese government bonds reflects Australia's broader economic relationship with China and increased financial ties.
Australia and China recently agreed on direct convertibility of the Australian dollar and the yuan.