China's central bank to push forward yuan internationalisation

52
1
China's central bank to push forward yuan internationalisation

SHANGHAI: China's central bank said it will continue to push forward yuan internationalisation to promote a higher level of two-way opening up its financial markets.

The People's Bank of China PBOC said it will promote a virtuous circulation of onshore and offshore yuan markets, and that it will resolutely fend off systemic risks in a report released on Friday Sep 23. The report comes at a time when the currency is facing renewed depreciation pressure, a hawkish Federal Reserve tightening and a slowing economy.

China and Japan are among the major outliers in a global run of interest rate hikes to tame high inflation, with Beijing focused on reviving the economy after COVID 19 shocks.

However, such widening policy divergence weighed on the yuan and prompted overseas investors to cut holdings of Chinese bonds for a seventh consecutive month in August.

The PBOC said in the report that it will help foreign investors, especially global central banks and similar institutions, to increase holdings of Chinese assets.

The central bank said that China will improve the liquidity of yuan-denominated financial assets, further facilitate foreign investors' access to Chinese markets for investments and enrich the variety of assets available for investments.