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China central bank says to steadily and prudently push forward yuan internationalisation

China central bank says to steadily and prudently push forward yuan internationalisation

FILE PHOTO: The headquarters of the People's Bank of China, the central bank, in Beijing, China, February 3, 2020. REUTERS/Jason Lee

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

The People's Bank of China (PBOC) also said it will also promote a virtuous circulation of onshore and offshore yuan markets, reiterating that it will "resolutely fend off systemic risks," it said in a yuan internationalisation report published on Friday (Sep 23).

The report comes at a time when the currency is facing renewed depreciation pressure, weighed by a buoyant dollar, hawkish Federal Reserve tightening and a slowing economy.

China, along with Japan, is among major outliers in a global run of interest rate hikes to tame high inflation, with Beijing focused on reviving the economy hurt by COVID-19 shocks.

But 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 facilitate overseas investors, especially global central banks and similar institutions, to increase holdings of Chinese assets.

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," the central bank said.

Source: Reuters/ga

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