The offshore yuan market is abuzz with activity on the first day that yuan-clearing services are offered by ICBC Singapore.

HSBC Singapore issued the first bond in the Singapore offshore yuan market, on Monday. The two-year notes to raise 500 million yuan will yield a fixed rate of 2.25 per cent.

The funds will be used to finance the bank's expansion of yuan-based lending assets.

Mr Matthew Cannon, head of global markets at HSBC Singapore, said that this issuance will help open the market to other issuers looking to fund themselves internationally in the Chinese yuan, and offer offer new investment opportunities to the substantial pool of wealth managed in Singapore.

Standard Chartered Bank also have plans to launch an offshore yuan-denominated senior unsecured notes on Monday.