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China facilitates interbank borrowing in foreign currencies

China facilitates interbank borrowing in foreign currencies

FILE PHOTO: Chinese Yuan and U.S. dollar banknotes are seen in this illustration taken February 10, 2020. REUTERS/Dado Ruvic/Illustration

SHANGHAI: China witnessed on Monday its first interbank borrowings in foreign currencies using foreign currency-denominated negotiable certificate of deposits (NCDs) as collateral, the Shanghai Clearing House said.

The completion of such repurchase agreements by six Chinese banks marks a broadening of the types of collateral eligible for foreign-currency interbank lending, the clearing house said in a statement.

The move would help institutions broaden foreign-currency financing channels, and improve liquidity management, it said.

(Reporting by SHANGHAI NEWSROOM; Editing by Gareth Jones)

Source: Reuters

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