Central banks are switching from euros into sterling despite the uncertainty surrounding the Brexit terms.
Concerns over political instability, weak growth and the European Central Bank’s negative interest rate policy mean that the UK is seen as a safer long-term haven for central banks’ investments, the FT reports.
In a survey conducted by HSBC and Central Banking Publications, the reserve managers at 80 central banks – who collectively oversee €6trn – said they are most concerned about the stability of the monetary union this year. Some respondents have removed all euro exposure while more than two thirds have altered their portfolio allocation.
Brexit only had a limited impact, with 71 per cent of respondents saying sterling’s long-term appeal remains intact, while many central bankers said Brexit may provide portfolio diversification opportunities in the future.