The Reserve Bank of Australia (RBA) this week has made a massive plunge on China's strengthening currency, called "RMB" or "Yuan," by initiating as about 2 billion Australian dollar play on the 'Yuan.'

By investing 5 percent of its total foreign currency assets in Chinese sovereign bonds, the Australian central bank is making a clear statement on its RMB position as the currency gains increasing importance in global money markets.

The move also suggests another breakthrough in the deepening relationship between the two countries.

RBA's Deputy Governor Dr. Philip Lowe said earlier this week that the People's Bank of China has approved the purchase, worth about 1.9 billion U.S. dollars.

The total RBA's foreign currency holdings are worth just under 38 billion U.S. dollars.

Lowe told business leaders in Shanghai it would be the first time the RBA invested directly in a sovereign bond market of an Asian country outside Japan.

"Over the long run, and particularly as capital account liberalization occurs in China, the RMB is likely to become one of the major reserve currencies of the region."

David Thomas, CEO, Think Global Consulting told Xinhua it was a win-win play from the Aussie central bank.

"This is a natural fit for a forward thinking RBA and a real, tangible outcome from the recent visit by Australian Prime Minister Julia Gillard."

"The internationalization of the RMB is shaping as a genuine ' mega-trend' and its good to see Australia making a real commitment by investing in Chinese government debt as an active RMB trader," Thomas told Xinhua.

Xinhua