China issues bonds to “promote the RMB in neighbouring countries”
In the latest move toward China’s long-term strategy of internationalising its currency, the Chinese Ministry of Finance announced today it will issue government bonds valued at 6 billion yuan in Hong Kong.
The last article I wrote on this subject was a little over a week ago when the Chinese Vice-Premier Wang opined that the government was looking for ways to make the Yuan a more international currency. I see this statement by the Finance Ministry as putting paid to those words.
The yuan bond issue, worth about $879 million, will ‘‘promote the RMB in neighboring countries,’’ referring to the renminbi currency, ‘‘and improve the yuan’s international status,’’ the Finance Ministry
said in the statement on its Web site.
‘‘The first step toward internationalization is regionalization,’’ Shi Lei, a foreign currency analyst at Bank of China in Beijing, said in an interview. ‘‘China wants to develop the offshore market in Hong Kong.’’
While domestic banks like Bank of China and the Export-Import Bank of China have already been issuing yuan-denominated bonds in Hong Kong for a couple of years, at the encouragement of Beijing, this is the first time that government bonds, the equivalent of treasuries, are to be issued. The bond sale is set for Sept. 28.
China to Sell Government Yuan Bonds in Hong Kong – Deal Book – NY Times