Beijing launches yuan-denominated bond in London

BEIJING • China's central bank, the People's Bank of China, has launched a yuan-denominated bond in London for the first time as it seeks to internationalise its currency.

The one-year bond offering a yield of 3.1 per cent was heavily oversubscribed, according to a banking source. Order books reportedly touched 30 billion yuan (S$6.6 billion), compared with a planned issue size of 5 billion yuan.

"An order book in excess of 30 billion RMB is a great positive statement of support for the market," said Mr Chris Jones, global head of local currency syndicate at HSBC.

The auction for the yuan-denominated bonds coincided with the four-day visit to Britain by Chinese President Xi Jinping.

It is said to be the first time that a yuan-denominated bond auction has taken place outside of China and Hong Kong. The move follows the agreements reached at the 7th China-UK Economic and Financial Dialogue in September.

China's central bank said it will help explore an offshore yuan market and facilitate cross-border trade and investment.

AGENCE FRANCE-PRESSE, REUTERS, XINHUA

A version of this article appeared in the print edition of The Straits Times on October 22, 2015, with the headline 'Beijing launches yuan-denominated bond in London'. Print Edition | Subscribe