China has launched several pilot Renminbi programmes over the years and the pace has quickened since the onset of the global financial crisis. Programmes introduced by China in the last 12 months, intended to enhance the international use of the Renminbi, included:
• yuan-denominated cross-border trade settlement and trade financing;
• yuan bonds issued by policy banks; and
• currency swaps.
Recently, China launched a Renminbi sovereign bond issue worth 6 billion yuan (US$878.5 million) in Hong Kong and this marked the key milestone in the internationalisation of the Renminbi. Holders of the Treasury bonds will enjoy guaranteed interest of between 2.25% to 3.3% depending on the terms subscribed.
The sale of the bonds is expected to end on 20 October 2009. Given the impact of the global financial crisis, prudent investors are increasingly favouring demand for sovereign bonds issued by a strong economy like China, compared with the corporate bond market.
Prior to the sovereign bond offer, several Chinese policy financial institutions have begun issuing yuan-denominated bonds in Hong Kong to help lay the foundation for the Renminbi internationalisation. To date, the Chinese Exim Bank, Bank of China and China Development Bank have collectively sold 14 billion yuan (US$2.06 billion) worth of yuan-denominated bonds in Hong Kong.
In addition, in July 2009, China allowed exporters and importers in Shanghai, Guangzhou, Shenzhen, Zhuhai and Dongguan to settle cross-border trade deals in Renminbi. China also signed currency swap agreements totalling 650 billion yuan (US$95.5 billion) with several countries.
• yuan-denominated cross-border trade settlement and trade financing;
• yuan bonds issued by policy banks; and
• currency swaps.
Recently, China launched a Renminbi sovereign bond issue worth 6 billion yuan (US$878.5 million) in Hong Kong and this marked the key milestone in the internationalisation of the Renminbi. Holders of the Treasury bonds will enjoy guaranteed interest of between 2.25% to 3.3% depending on the terms subscribed.
The sale of the bonds is expected to end on 20 October 2009. Given the impact of the global financial crisis, prudent investors are increasingly favouring demand for sovereign bonds issued by a strong economy like China, compared with the corporate bond market.
Prior to the sovereign bond offer, several Chinese policy financial institutions have begun issuing yuan-denominated bonds in Hong Kong to help lay the foundation for the Renminbi internationalisation. To date, the Chinese Exim Bank, Bank of China and China Development Bank have collectively sold 14 billion yuan (US$2.06 billion) worth of yuan-denominated bonds in Hong Kong.
In addition, in July 2009, China allowed exporters and importers in Shanghai, Guangzhou, Shenzhen, Zhuhai and Dongguan to settle cross-border trade deals in Renminbi. China also signed currency swap agreements totalling 650 billion yuan (US$95.5 billion) with several countries.