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China's Ministry of Finance (MOF) said Tuesday that it planned to issue 6 billion yuan ($878.5 million) worth of treasury bonds in Hong Kong on September 28.
The announcement, jointly made by the MOF and the government of the Hong Kong Special Administrative Region (HKSAR), is aimed at lifting the international status of the yuan.
It is the first time the central government has issued yuan-denominated treasury bonds outside the Chinese mainland.
The sale of such bonds to individuals and institutions in Hong Kong is meant to "promote the acceptance of the yuan for global trade among neighboring countries and regions" and also to "steadily expand the scale of Hong Kong's RMB bonds market", the MOF said in a statement on its website.
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Ding Zhijie, a professor with the University of International Business and Economics, said the international status of the yuan is in essence the acceptance of the currency outside the country.
That means individuals and institutions outside the country should be allowed to have access to hold the currency and also to make investment with the currency, he said. The latest move of the MOF would facilitate such a process.
Chen Bingcai, a foreign exchange expert, said there has already been holding of the yuan outside the country, since China launched in July cross-border trade settlement in yuan in some mainland cities for trade with Hong Kong, Macao and some regional trading partners.
"Naturally, there are needs for the yuan in Hong Kong to flow back into the country through investment," Chen said, "The issuance of yuan-denominated treasury bonds in Hong Kong would provide such a reliable yuan investment channel for yuan deposits in the city."
Actually, mainland financial institutions in Hong Kong had been allowed to issue yuan-denominated bonds in the city since the beginning of 2007, however, there had always been a lack of benchmark rates or guiding prices for the bonds.
Nearly 10 mainland financial institutions in Hong Kong, including the Bank of China, had issued a combined 30 billion yuan worth of bonds on the Hong Kong market since 2007.
The issuance of such yuan-denominated treasury bonds would form a benchmark rate, and therefore serve as the benchmark price for yuan assets in Hong Kong, Chen said.
China's Ministry of Finance (MOF) said Tuesday that it planned to issue 6 billion yuan ($878.5 million) worth of treasury bonds in Hong Kong on September 28.
The announcement, jointly made by the MOF and the government of the Hong Kong Special Administrative Region (HKSAR), is aimed at lifting the international status of the yuan.
It is the first time the central government has issued yuan-denominated treasury bonds outside the Chinese mainland.
The sale of such bonds to individuals and institutions in Hong Kong is meant to "promote the acceptance of the yuan for global trade among neighboring countries and regions" and also to "steadily expand the scale of Hong Kong's RMB bonds market", the MOF said in a statement on its website.
[..]
Ding Zhijie, a professor with the University of International Business and Economics, said the international status of the yuan is in essence the acceptance of the currency outside the country.
That means individuals and institutions outside the country should be allowed to have access to hold the currency and also to make investment with the currency, he said. The latest move of the MOF would facilitate such a process.
Chen Bingcai, a foreign exchange expert, said there has already been holding of the yuan outside the country, since China launched in July cross-border trade settlement in yuan in some mainland cities for trade with Hong Kong, Macao and some regional trading partners.
"Naturally, there are needs for the yuan in Hong Kong to flow back into the country through investment," Chen said, "The issuance of yuan-denominated treasury bonds in Hong Kong would provide such a reliable yuan investment channel for yuan deposits in the city."
Actually, mainland financial institutions in Hong Kong had been allowed to issue yuan-denominated bonds in the city since the beginning of 2007, however, there had always been a lack of benchmark rates or guiding prices for the bonds.
Nearly 10 mainland financial institutions in Hong Kong, including the Bank of China, had issued a combined 30 billion yuan worth of bonds on the Hong Kong market since 2007.
The issuance of such yuan-denominated treasury bonds would form a benchmark rate, and therefore serve as the benchmark price for yuan assets in Hong Kong, Chen said.