SEOUL: South Korea's central bank said on Friday it had commenced investment in Chinese yuan government bonds April 24 with its investment limit set at 20 billion yuan ($3.17 billion).

The investment is part of a long-term plan to diversify its foreign exchange reserves and build up its yuan portfolio, the Bank of Korea said in a statement.

The Bank of Korea received its investment quota for Chinese bonds in January this year from the People's Bank of China.